Abhijit V. Banerjee and Esther Duflo, Good Economics for Hard Times: Better Answers to Our Biggest Problems, Allen Lane, 2019; hbk £25 or less, pbk £10.99.
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The dust jacket of Good Economics for Hard Times proclaims its authors (hereafter, BanerDu) as 'Winners of the Nobel Prize', but the text itself appears to predate the award, which was announced in December 2019. Their first book, Poor Economics, was in effect their application for it. This one is a project of a different kind, perhaps written in hope or expectation of receiving it. It presents them as eminent persons, addressing a very wide range of themes - successive chapters take up the issues of migration, trade, identity, growth policy, climate change, robots, government, and 'cash versus care' - but it is undermined by a very fragmented structure, a lack of clarity as to the intended audience or approach, a regrettable tendency to make themselves the centre of everything, and a lack of understanding, at a very basic level, of key features of contemporary global capitalism.
In fact it is as odd a book as you could imagine. To start with the structure, between the first and last chapters (nine and four pages respectively, each in a single section, the remaining seven consist of a large number of separate sections, some a page or less, and far too many self-contained, with eccentric titles ranging from 'Workers and Watermelons', 'Through a Glass Darkly', 'Beauty is Truth, Truth Beauty', 'Clusterf**k!' and 'Size Matters' to 'The Doctor and the Saint', 'Cricket Lessons', 'The War of the Flowers', 'Bathing in the Baltic', and 'A Tale of Two Footballs' - 134 sections in the central 313 pages, some (too many) revolving around personal anecdotes or recent news items, others on topical policy issues, others on the contributions of leading figures in the profession, and others again summarising recent articles from a narrow range of 'top journals', for all the world as if BanerDu started to write in late 2018 and knocked off a section every day or two until the text was complete. The result is that the overall tone is very uneven, and the overwhelming impression is one of disjointedness. Beyond that, the text is marred by tensions between expressions of personal belief on the one hand and claims of objectiveness on the other, confusion over intent, and shortcomings in the selection and pursuit of evidence. It starts badly, with BanerDu affecting a rather grating tone of false modesty over their decision to write a second book after they 'somehow got away with' the first one, and wondering whether they are the right people to write this one (ix); they self-identify, as if there were doubt, as inhabitants of 'the liberal, "enlightened" elite world' (1), and thereafter they waver between conviction in the rightness of their liberal values, and their ambition, as social scientists, 'to offer facts and interpretations of facts we hope will help mediate these divides [between the political right and the liberal elite], help each side understand what the other is saying, and thereby arrive at some reasoned disagreement, if not a consensus' (2). As was often the case in Poor Economics, these are just empty words, with little relationship to their actual practice: their aspiration to balance is undercut by the fact they are too often out to settle old scores, and have already ignored their own advice ('We should not stop telling the truth, but it is more useful to express it in a non-judgemental way', p. 121) by contrasting the 'dawn-light of the early Obama years' with the 'psychedelic madness of Brexit, the Yellow Vests, and the Wall' (ix). They later concede (p. 224, cf. 253) that the Yellow Vests 'did have a point'.
Crucially, their own account of their purpose is ambiguous, caught between telling liberals a comforting tale, and taking a balanced and objective stance that admits possible shortcomings:
'We wrote this book to hold on to hope. To tell ourselves a story of what went wrong and why, but also as a reminder of all that has gone right. A book as much about the problems as about how our world can be put back together, as long as we are honest about the diagnosis. A book about where economic policy has failed, where ideology has blinded us, where we have missed the obvious, but also a book about where and why good economics is useful, especially in today's world' (ix, emphases mine).
A great deal hinges on the ambiguity here of the first person plural – we, us, ourselves. The first use of ‘we’ unambiguously refers to BanerDu only. ‘Ourselves’ may do also, but more likely refers to ‘liberals’, or the ‘liberal elite’; the next occurrence of ‘we’ may relate to BanerDu, liberals, or everyone. The ‘us’ that follows should include BanerDu, but may not in practice; it may refer to academic economists in particular; and same goes for the ‘we’ that follows. A lot depends on whether BanerDu themselves have the capacity to be self-critical, or whether in practice it is only the political right that is called upon to be honest and to see past the ideology that is blinding it. And the ambiguity is compounded by statements such as the following:
‘We don’t for a moment believe that when economists and the public have different views, economists are always right. We, the economists, are often too wrapped up in our models and our methods, and sometimes forget where science ends and ideology begins. We answer policy questions based on assumptions that have become second nature to us because they are the building blocks of our models, but it does not mean that they are always correct. But we also have useful expertise no one else has. The (modest) goal of this book is to share some of this expertise and reopen a dialogue about the most urgent and divisive topics of our times’ (5).
‘For that,’ you might expect them to go on, ‘we [BanerDu] will re-assess our assumptions, review our models and methods critically, and consider whether we have inadvertently moved from science to ideology, with the result that our ‘expertise’ is not as well-founded and therefore as useful as we imagine (leaving aside the philosophical questions this raises regarding science versus ideology). But they don’t. Instead, they go on, ‘For that, we need to understand what undermines trust in economists’ (6). They seem to assume unreflectingly that their expertise emerges unscathed, regardless of issues of models, methods and ideology. And they compound the problem of trust by going on immediately to say, ‘A part of the answer is that there is plenty of bad economics around’ – particularly ‘self-proclaimed economists on TV and in the press – chief economists of Bank X or Bank Y’, often with an interest to represent, and ‘the talking heads are hard to tell apart from academic economists’ (6). Not only that, but the IMF is just as likely as these ‘talking heads’ to make erroneous forecasts; and so, after various other considerations: ‘This means that economists often get things wrong. We will no doubt do so many times in this book’ (7). Then, having inadvertently hit on what it is that undermines trust, they take their stand on humane values: ‘It is important that in this project we be guided by an expansive notion of what human beings want and what constitutes the good life. … Restoring human dignity to its central place, we argue in this book, sets off a profound rethinking of economic priorities and the ways in which societies care for their members, particularly when they are in need’ (9). Fine words, but they beg the question (to which Marx had a good answer): how far is this compatible with the political economy of contemporary capitalism? As it turns out, the principal feature of what follows is that BanerDu shy away repeatedly from addressing this question honestly, rarely touching directly on key features of contemporary political economy, and indeed of 'hard times'. And when they do, they quickly back away. As it turns out, they do not want to think too much about capitalism, and they seem to have no idea how it works.
So to the substance of the book, with an emphasis, for reasons that will become apparent, on the topics of migration and trade. On migration, BanerDu make two arguments. First, that on available evidence, a influx of migrants does not lead to lower wages for local workers, and second, that far from migration being excessive, people are generally very reluctant to leave home, so there is far too little of it, whether internal or international, for economic efficiency or overall welfare. In policy terms, their approach sticks faithfully to the positions of the World Bank and the OECD (both far more supportive of migration than their member governments), so that little is unorthodox or new. But they play fast and loose with evidence, and conspicuously fail to address key issues head on. So the chapter opens with a swipe at 'President Donald Trump's imaginary but enormously consequential hordes of murderous Mexican migrants and the anti-foreigner rhetoric of the Alternative for Germany, the French Rassemblement National, and the Brexit crew, not to mention the ruling parties in Italy, Hungary and Slovakia' (10), but BanerDu offer no discussion or corrective analysis of either the flow of migrants into the United States, or movements of workers within the European Union. Anyone expecting a liberal perspective on economic migration in the contemporary world, let alone a critical one, will be disappointed. Instead, they profile a debate among academic economists which takes as its starting point the demonstration by David Card that the influx of migrants from Cuba to Florida at the time of the Mariel boatlift of 1980 had no downward impact upon wages (Card, 1990), and make very brief reference to a handful of other studies, the most recent of which concerns the 'large influx of immigrants from countries as diverse as Bosnia, Afghanistan, Somalia, Iraq, Iran, Vietnam, Sri Lanka and Lebanon' into Denmark between 1994 and 1998 (Foged and Peri, 2016). I have no interest in making the argument that such influxes drive wages down. What is at issue is whether the way in which BanerDu make the argument is relevant, even-handed, and trustworthy. So it is to the point that neither of these studies addressed economic migration (the Danish case involved a policy of deliberate dispersal of refugees across the country). Equally, it is a concern that there is no mention of a later and far more widely based paper by Card (drawing on the 1990 Census in the United States), which similarly found 'relatively small effects on the relative wage structure' from even high levels of immigration, but also found that: 'Inflows of new immigrants are associated with lower employment rates among natives and earlier immigrants ... The estimates imply that immigrant arrivals between 1985 and 1990 depressed the employment rate of low-skilled natives in major US cities by 1-2 percentage points on average, and by substantially more [5-10 per cent] in high-immigrant cities' (Card, 1997, abstract). It is hard, too, to see why nothing is said regarding these issues in the long recession after 2008 (coincidentally, the last year for which Foged and Peri have data), especially as the study BanerDu cite in conclusion as confirming their position identifies the 'overall health of the economy' as a key variable (Blau and Mackie, eds, 2017: 203). And it is shocking that when they draw on that study, they flag its conclusion as being 'as close to unequivocal as you are ever going to get from a group of economists: "Empirical research in recent decades suggests that ... when measured over a period of more than ten years, the impact of emigration on the wages of natives overall is very small" (23, citing Blau and Mackie, no page reference provided) - when this is a truncated and misleading view of its findings. The full summary of its conclusions runs to three pages (ibid: 202-5); the passage they cite (from p. 204) is followed immediately by a series of qualifications, among which that some though not all studies find 'sizable negative short run wage impacts for high school dropouts, the native born workers who in many cases are the group most likely to be in direct competition for jobs with immigrants', while others suggest that 'among those with low skill levels, the negative effect on native's (sic) wages may be larger for disadvantaged minorities ... and Hispanic high school dropouts with poor English skills'; another regularity is that 'there are larger negative effects on native wages from immigrant inflows in the short run'; and although most studies find 'little effect of immigration on the employment of natives ... recent research ... does find that native teen employment measured in hours worked, but not the employment rate, is reduced by immigration. Moreover, as with wage impacts, there is evidence that the employment rate of prior immigrants is reduced by new immigration - again suggesting a higher degree of substitutability between new and prior immigrants than between new immigrants and natives' (ibid: 204-5). This is not an indictment of economic migration, as the report is on balance clearly favourable towards it. But it is a balanced perspective which takes account of all the evidence to hand, precisely the approach BanerDu promised but fail to deliver. To state the obvious, their refusal to read or present evidence with care completely undermines their claim to objectivity, and rules out any serious engagement with the politics of migration.
In their only discussion of economic migration in the US or the EU they go back to 1964 to recall the response of farmers who could previously count on 'a reliable supply of low-wage workers' to the expulsion of braceros (Mexican field hands) from California in December of that year - rather than seeking to hire native workers, they opted for mechanisation, even if they needed to switch crops in order to do so (24). Their discussion then becomes general, with the comment that migrant workers complement native workers as
'they are willing to perform tasks natives are reluctant to carry out; they mow lawns, flip burgers, attend to the needs of babies or sick people. So when there are more migrants, the price of those services tends to go down, which helps the native workers and frees them to take on other jobs. Highly skilled women, in particular, are more likely to be able to go out to work when there are many migrants around. The entry of highly skilled women to the labour market in turn boosts demand for low-skilled labour (childcare, catering, cleaning) at home or in the firms they manage or run' (25).
This is of course doubly familiar. First because it raises the issue of labour in the 'care economy', and second because in doing so it replicates precisely the perspective taken on it by the World Bank. First, the lack of any critical reflection is striking. Worse, as the chapter proceeds, a picture emerges of a fantasy world, in which employers are hesitant to hire workers without knowing something about them in case they turn out badly:
'even where laws don't make it difficult to fire a worker, firing is unpleasant at best, and potentially dangerous if the disgruntled employee becomes enraged. Therefore, most firms will not hire just anyone willing to work for them. They worry whether the worker will show up for work on time, whether the work will be up to snuff, whether they will fight with their colleagues, insult an important client, or break an expensive machine' (28).
Just what lies behind this lurid flight of fancy, I cannot say. But when BanerDu go on to state that 'employers are also reluctant to have large differences in wages within their establishments, for fear of lowering morale' (29), then trace out a line of thought that concludes with the baffling statement that: 'Once some people have connections, the market can unravel, with the consequence that most people become unemployable' (33, emphasis mine) you wonder first whether they have been led into error by the models they follow (Akerlof in this case), and second whether they know anything at all about contemporary labour markets, and particularly the record high levels of employment as a percentage of working age populations (which they actually note for the US, p. 229), and the increasingly prevalent stratification between 'permanent' core workers on the one hand, and an increasingly numerous and precarious casual workforce on the other - zero hours contracts, the dwindling away of the 'standard employment contract', and all the rest. In fact, it turns out that they do know that labour markets are fundamentally stratified ('segregated by skill level', p. 43), and they spell out that 'immigrants often end up in jobs natives do not want, or in cities no one wants to go to. There, they are not taking jobs from anyone; those jobs would remain unfilled if there were no migrants willing to take them' (29). In short, in the process of demolishing myths as they are setting out here to do, BanerDu bring to light some fundamental truths about global labour markets, but seem unconcerned to reflect on them at all critically. Instead, they are at one with the World Bank in seeking to reshape risk to maximise the size and flexibility of the global proletariat, keenly promoting technical ruses that overcome the conservative tendency to loss aversion and encourage workers to move (37-42). And they end the chapter with a focus on obstacles to internal mobility in the United States, where high housing costs and the cost of leaving local support networks mean that less well educated and low-skilled workers 'are often unable or unwilling to move, within and outside the country of their birth, to take advantage of economic opportunities'. 'Does that suggest', they ask, 'that a forward-looking government should reward people who move and perhaps even penalize those who refuse to?' (47). They opt for the first of these alternatives. Given that national and international mobility enables economies to absorb crises and adapt to structural transformation, procedures should be simplified, information provided, money transfers facilitated, and possibly insurance offered against failure. But the chapter typically ends on a note of wishful thinking. The best way to make labour markets work better, they say, would be by 'easing integration' by offering housing assistance, perhaps including rent subsidies, pre-migration matching to a job, and help with childcare arrangements. This would help and perhaps encourage migrants 'while making locals more accepting' - after which they go on to document 'widespread and hostile political reactions' to immigrants in the past, without addressing how the policies they propose would avoid such reactions in the future. In sum, the significance of international migration for them is that it provides a potentially unlimited supply of low-wage labour for areas of work that native workers are unwilling to take. But they neither address the area that has proved most problematic in the past, nor show a shred of awareness of the very widely documented abuses to which international migrants are subject, even in the best-regulated legal channels of migration, let alone in the 'continuum of exploitation' that runs from genuinely voluntary migration to the shadowy world of coercion, gang-masters, trafficking, people-smuggling and the risk of death in transit (among many others, Strauss, 2013, Strauss and McGrath, 2017, Fudge, 2018, and the dozens of references therein). In short, they do not transcend their narrow focus on 'efficient labour markets', abstractly conceived in accordance with liberal principles.
I cannot deal with the rest of the book in such detail, and indeed there is no need, as the same pattern repeats. The chapter on trade ponders for ten pages over the fact that trade liberalization over the last thirty years has led to greater inequality as lower-skilled workers' wages in the developing world have not kept pace with those of the higher-skilled, in apparent contradiction to the standard Stolper-Samuelson model. They are nonchalant in the extreme in moving between the highly restrictive assumptions of the model on the one hand and the real world on the other; and whereas the previous chapter took the sudden influx of migrants to a local economy as the starting point in its exploration of wage effects, this one declines to centre the discussion on the same sudden influx into the global economy. It acknowledges the massive expansion in the size of the global proletariat over the same period only at the very end of the discussion, and then as an afterthought ('It is also true that Mexico and other Latin American countries opened up at exactly the same time when China was also opening up, and therefore they all faced competition from a more labour-abundant economy. Perhaps that was what hurt workers in these economies' (60). No shit, Sherlock, as a particular friend of mine would say. True to form, having broached one of the key aspects of the contemporary global capitalist economy, they enquire no further.
Instead, they launch into a bizarre and incongruous account of how Petia Topalova was 'black-balled by the academic elite' and driven to resort to working for the IMF, for suggesting, contrary to neo-classical theory, that 'the more exposed a particular district [in India] was to trade [after 1991], the slower poverty reduction was in that district' (62). It's an odd way into a significant literature. For a start, the theory in question assumes perfect mobility of factors (including labour), a feature that is known not to obtain in the real world - hence the liberal policy imperative, embraced by BanerDu, to increase the mobility of labour. Readers will be baffled by heavy (and entirely unsubstantiated) hints about skulduggery among peer reviewers and journal editors, in what appears to be a private spat with un-named trade economists who 'felt threatened' (64) by the work, and I can't throw much light on it myself - except to note that the paper in question was produced by Petalova while still a PhD student in the Department of Economics at MIT, and, I wouldn't mind betting, supervised by BanerDu themselves (although they don't say so). It's not unusual for a paper produced by a PhD candidate to take a while to get into a leading journal, and in any case Topalova's work was taken up very quickly (see for example Goldberg and Pavcnik, 2007, which they cite). All that is rather by the way, but their petty partisan approach entirely obscures, for readers to whom the book is supposedly directed, the policy issue that is at stake. In a section entitled 'The Sticky Economy', BanerDu note that in India 'Topalova found the negative effect of trade liberalization on poverty was exacerbated in states where strict labour laws made it very difficult to fire workers and shrink unprofitable firms, allowing profitable firms to take their place' (64), and they conclude the section by observing that she found little evidence of 'creative destruction'. So they do find their way to the long-standing position of the OECD and the World Bank, with their push for more flexible policies for the 'hiring and firing' of workers, notably in the series Going for Growth and Doing Business respectively. But they still don't convey the nature of the broader contribution of this line of analysis, which mostly runs counter to their 'stickiness' approach to argue that trade liberalisation in conjunction with the fragmentation of production creates significant niche opportunities for industrialisation in the developing world. Nina Pavcnik and Pinelopi Goldberg, the latter until 1 March 2020 Chief Economist at the World Bank, are leading figures here, and you can get a much better idea of the policy issues from their work, which BanerDu cite only in passing in support of Topalova (a joint author with them on occasions). Such is their instinct to see the world as revolving around themselves that they completely omit any reference to the paper by Pavcnik (2002) that can be credited as sparking this line of analysis into life:
'I find support for productivity improvements related to liberalized trade. I show that after trade liberalization, the productivity of plants in the import-competing sectors grew 3 to 10% more than in the nontraded-goods sectors. This finding ... suggests that exposure to foreign competition forced plants in sectors that used to be shielded from the international competition to trim their fat. ... I find that exiting plants are on average about 8% less productive than the plants that continue to produce. Although it is hard to pinpoint the exact mechanism of productivity improvements, this result implies that plant exit also contributes to the reshuffling of resources within the economy. Evidence from the industry-level aggregate productivity indices additionally suggests that the reallocation of market shares and resources from less to more efficient producers is an important channel of productivity improvements' (Pavcnik, 2002: 248).
You could certainly see this as a specific instance of 'creative destruction' if you wanted, though Pavcnik doesn't describe it as such. More to the point, the mechanism she describes is actually not so hard to pinpoint, being exactly the one that Marx identifies as driving the development of capitalism on a global scale - a mechanism in which trade has to seen as a moment in the broader process of competition-induced crisis and innovation in the world market as a whole. In a process thoroughly understood by the OECD and the World Bank, and advocated for the developed world, some firms innovate and thrive under competitive pressure, while others fail and disappear, leading to local and global increases in productivity and 'efficiency'. But BanerDu's narrow focus gives the reader no chance of appreciating this broader context, and frankly, if I weren't reviewing the book I would have put it aside at this point. Although to be fair, had I done so, I would have missed a comical account of their attempt to purchase a DVD player (68-9), which is inconsequential, but still one of their better anecdotes, and their later confession that they struggle with dressing themselves properly (219).
For the rest, then, I offer a stripped down summary and a critique. Chapter Four, on likes, wants and needs, profiles experimental data from behavioural economics to argue that people are reluctant to change their minds, but also subliminally suggestible, so are best moved towards 'better' behaviour by surreptitious nudges; Chapter Five argues that for all the academic work on growth, 'we' don't know much about why how it happens or what to do when it falters - so the burden of over sixty rambling pages is that: 'We don't understand very well what can deliver permanently faster growth. It just happens (or not)' (179). Chapter Six, 'In Hot Water' offers an anodyne consideration of climate change, arguing that it has bad consequences, especially for the poor in the developing world, without rising above the standard of an average undergraduate essay; Chapter Seven, 'Player Piano' (the reference is to Kurt Vonnegut's first novel, from 1952), starts off by talking about jobs in the context of robotisation, but turns into a gentle run through familiar data on rising inequality of incomes. Chapter Eight, 'Legit.Gov' (sic) starts out by asking how the legitimacy of the state can be restored, but over a brief and very awkward 14 pages dwells at length on corruption and ends by talking about conditional cash transfers in Mexico. It is essentially a bridge to Chapter Nine, 'Cash and Care', a discussion of social protection reform that focuses on universal basic income (UBI) as a means to encourage productivity-enhancing mobility and argues for the need to factor the 'desire to be respected' into social protection programmes.
The key to all of this is the long, rambling chapter on growth, with its conclusion that it is a mystery. The important point is not that the literature on growth is flaky (though it is), it is that BanerDu seem really to believe that orthodox theory is obsessed with growth, whereas they want to focus on well-being instead. This is not a fundamental critique (after all, it is what the OECD has been saying for years). Rather, it is a fundamental misunderstanding of the way in which neoclassical economics and its offshoots abstract away from class exploitation, and install growth as an ideology, presenting it as a universal good. This is why debates over class interest take the perverted form of debates over 'distribution'. The limitations of BanerDu's position become clear in Chapter Seven, where they present Reagan and Thatcher as elected in a time 'dominated by anxiety about the end of growth' (239), and obsessed with restoring it as 'a matter of national pride' (236). And they go on: 'For both Margaret Thatcher in the UK and Ronald Reagan in the US, what was to blame for the slump in the late-1970s was clear (though we now know they had no idea). The countries had drifted too far to the left - unions were too strong, the minimum wage was too high, taxes were too onerous, regulation was too overbearing' (ibid). Well, growth in both countries did fall briefly below zero in 1970 and, after the first oil shock, in 1974 and 1975, as it would again after the second oil shock, in 1980. But it averaged 3.3 per cent per year in the UK 1976-9, and over 4 per cent in the US. In macroeconomic terms, the major issue was inflation. There was no slump in the late 1970s. And as it happens, the UK introduced a minimum wage only in 1999. Thatcher and Reagan were not obsessed with growth, but with restoring the 'value of money' and the hegemony of capital over labour, and they were willing to sacrifice growth in the short term to do so. So it is BanerDu, rather than Thatcher and Reagan, who have 'no idea' (cf. 285-7).
And as it turns out, they have no idea either about the thinking that underpins the positions taken by the OECD and the World Bank, despite the fact that they inhabit precisely the same policy arena. So they drop into the chapter on growth a brief reference to the 2016 World Development Report, Digital Dividends, commenting that 'after much hemming and hawing, [it] concluded that on the impact of the internet, the jury was out' (187). Let's see. The Foreword began by saying: 'We find ourselves in the midst of the greatest information and communications revolution in human history', went on to say that the Report 'finds that traditional development challenges are preventing the digital revolution from fulfilling its transformative potential', and 'concludes that 'the full benefits of the information and communications transformation will not be realized unless countries continue to improve their business climate, invest in people's education and health, and promote good governance'. This is classic liberal political economy. In short, digital technologies had to be part of a programme of broader economic reforms, and the World Bank Group was 'already working with clients to promote competitive business environments, increase accountability, and upgrade education and skills-development systems to prepare people for the jobs of the future' (xiii). Two pages later, and without spotting a connection, BanerDu report two related benefits of cell phones for fishermen in Kerala - quick identification of the best markets to sell their fish, and a far more competitive market for boat-building (189-90).
So, as was the case with Poor Economics, their core policy recommendations generally echo those of the World Bank and the OECD, as we have seen with the mobility of labour: 'Some employment protection is of course necessary; workers cannot be at the whim of their employer. But labour market regulations are so stringent [in Ghana, in this case] that they really put a chokehold on any efficient allocation of resources' (200). And when they return to a contemporary policy agenda in Chapter Nine, they place themselves firmly on the current terrain of the international organizations, for whom the principal problem is that too many people around the developing world are not incorporated into the world market through 'good jobs'; they note that in India,'most people work in agriculture or on tiny firms (sic, 294); and they favour both good quality pre-school education and better day care, the latter on the grounds that: 'Expanding highly subsidized quality whole-day care is one very effective way to raise incomes among low-income women by, quite simply, making work pay' (310). All much as you would expect. But they don't have much time for the detail, preferring anecdotes and micro-level 'experiments'. it is symptomatic of this that in a chapter entitled 'Cash and Care', they have only this to say about the elderly, apparently forgetting the army of immigrants they identified at the outset:
'Working with the elderly can be challenging, and in the United States these jobs pay very little; in other words, they are not very attractive. But that again could change. We need to provide the money to hire enough people, train them adequately, ensure they have enough time to spend with each person, and pay them well enough to make them proud of the work they do' (311).
They have plenty more ideas along similar lines: 'Everyone should be able, just as four out of five Americans do, to find meaning in their jobs'; and 'We each should have a universal right to a productive life within society' (315). And for this to work, we just have to treat people with respect. Unfortunately, they don't explain how this can be compatible with the politics of global competitiveness which they endorse, let alone with the brutal global patterns of exploitation attending it with which they entirely fail to engage. Instead, they offer the thought that the 'goal of social policy, in these times of change and anxiety, is to help people absorb the shocks that affect them without allowing those shocks to affect their sense of themselves' (322). The shocks are apparently non-negotiable, so with all due respect, people must adapt.
References
Blau, Francine D. and Christopher Mackie, eds, The Economic and Fiscal Consequences of Immigration, National Academies Press, Washington DC.
Card, David. 1990. 'The Impact of the Mariel Boatlift on the Miami Labour Market', Industrial and Labour Relations Review, 45, 3, 556-572.
Card, David, 1997. 'Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration', NBER Working Paper, 5927, February.
Foged, Mette, and Giovanni Peri. 2016. 'Immigrants' Effect on Native Workers: New Analysis on Longitudinal Data', American Economic Journal: Applied Economics, 8, 2, 1-34.
Fudge, Judy, 2018. 'Illegal Working, Migrants, and Labour Exploitation in the UK', Oxford Journal of Legal Studies, 38, 3, 557–584.
Gentilini, Ugo, Margaret Grosh, Jamele Rigolini and Rusian Yemtsov, eds. 2020. Exploring Universal Basic Income: A Guide to Navigating Concepts, Evidence, and Practices, World Bank, Washington DC.
Goldberg, Pinelopi, and Nina Pavcnik, 2007, 'Distributional Effects of Globalization in Developing Countries', Journal of Economic Literature, 45, 1, 39-82.
Pavcnik, Nina, 2002. 'Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants', Review of Economic Studies, 69, 1, 245-276.
Strauss, Kendra. 2013. 'Unfree Again: Social Reproduction, Flexible Labour Markets and the Resurgence of Gang Labour in the UK', Antipode, 45, 1, 180-197.
Strauss, Kendra and Siobhan McGrath, 2017. 'Temporary migration, precarious employment and unfree labour relations: Exploring the ‘continuum of exploitation’ in Canada’s Temporary Foreign Worker Program', Geoforum, 78, 199-208.
In fact it is as odd a book as you could imagine. To start with the structure, between the first and last chapters (nine and four pages respectively, each in a single section, the remaining seven consist of a large number of separate sections, some a page or less, and far too many self-contained, with eccentric titles ranging from 'Workers and Watermelons', 'Through a Glass Darkly', 'Beauty is Truth, Truth Beauty', 'Clusterf**k!' and 'Size Matters' to 'The Doctor and the Saint', 'Cricket Lessons', 'The War of the Flowers', 'Bathing in the Baltic', and 'A Tale of Two Footballs' - 134 sections in the central 313 pages, some (too many) revolving around personal anecdotes or recent news items, others on topical policy issues, others on the contributions of leading figures in the profession, and others again summarising recent articles from a narrow range of 'top journals', for all the world as if BanerDu started to write in late 2018 and knocked off a section every day or two until the text was complete. The result is that the overall tone is very uneven, and the overwhelming impression is one of disjointedness. Beyond that, the text is marred by tensions between expressions of personal belief on the one hand and claims of objectiveness on the other, confusion over intent, and shortcomings in the selection and pursuit of evidence. It starts badly, with BanerDu affecting a rather grating tone of false modesty over their decision to write a second book after they 'somehow got away with' the first one, and wondering whether they are the right people to write this one (ix); they self-identify, as if there were doubt, as inhabitants of 'the liberal, "enlightened" elite world' (1), and thereafter they waver between conviction in the rightness of their liberal values, and their ambition, as social scientists, 'to offer facts and interpretations of facts we hope will help mediate these divides [between the political right and the liberal elite], help each side understand what the other is saying, and thereby arrive at some reasoned disagreement, if not a consensus' (2). As was often the case in Poor Economics, these are just empty words, with little relationship to their actual practice: their aspiration to balance is undercut by the fact they are too often out to settle old scores, and have already ignored their own advice ('We should not stop telling the truth, but it is more useful to express it in a non-judgemental way', p. 121) by contrasting the 'dawn-light of the early Obama years' with the 'psychedelic madness of Brexit, the Yellow Vests, and the Wall' (ix). They later concede (p. 224, cf. 253) that the Yellow Vests 'did have a point'.
Crucially, their own account of their purpose is ambiguous, caught between telling liberals a comforting tale, and taking a balanced and objective stance that admits possible shortcomings:
'We wrote this book to hold on to hope. To tell ourselves a story of what went wrong and why, but also as a reminder of all that has gone right. A book as much about the problems as about how our world can be put back together, as long as we are honest about the diagnosis. A book about where economic policy has failed, where ideology has blinded us, where we have missed the obvious, but also a book about where and why good economics is useful, especially in today's world' (ix, emphases mine).
A great deal hinges on the ambiguity here of the first person plural – we, us, ourselves. The first use of ‘we’ unambiguously refers to BanerDu only. ‘Ourselves’ may do also, but more likely refers to ‘liberals’, or the ‘liberal elite’; the next occurrence of ‘we’ may relate to BanerDu, liberals, or everyone. The ‘us’ that follows should include BanerDu, but may not in practice; it may refer to academic economists in particular; and same goes for the ‘we’ that follows. A lot depends on whether BanerDu themselves have the capacity to be self-critical, or whether in practice it is only the political right that is called upon to be honest and to see past the ideology that is blinding it. And the ambiguity is compounded by statements such as the following:
‘We don’t for a moment believe that when economists and the public have different views, economists are always right. We, the economists, are often too wrapped up in our models and our methods, and sometimes forget where science ends and ideology begins. We answer policy questions based on assumptions that have become second nature to us because they are the building blocks of our models, but it does not mean that they are always correct. But we also have useful expertise no one else has. The (modest) goal of this book is to share some of this expertise and reopen a dialogue about the most urgent and divisive topics of our times’ (5).
‘For that,’ you might expect them to go on, ‘we [BanerDu] will re-assess our assumptions, review our models and methods critically, and consider whether we have inadvertently moved from science to ideology, with the result that our ‘expertise’ is not as well-founded and therefore as useful as we imagine (leaving aside the philosophical questions this raises regarding science versus ideology). But they don’t. Instead, they go on, ‘For that, we need to understand what undermines trust in economists’ (6). They seem to assume unreflectingly that their expertise emerges unscathed, regardless of issues of models, methods and ideology. And they compound the problem of trust by going on immediately to say, ‘A part of the answer is that there is plenty of bad economics around’ – particularly ‘self-proclaimed economists on TV and in the press – chief economists of Bank X or Bank Y’, often with an interest to represent, and ‘the talking heads are hard to tell apart from academic economists’ (6). Not only that, but the IMF is just as likely as these ‘talking heads’ to make erroneous forecasts; and so, after various other considerations: ‘This means that economists often get things wrong. We will no doubt do so many times in this book’ (7). Then, having inadvertently hit on what it is that undermines trust, they take their stand on humane values: ‘It is important that in this project we be guided by an expansive notion of what human beings want and what constitutes the good life. … Restoring human dignity to its central place, we argue in this book, sets off a profound rethinking of economic priorities and the ways in which societies care for their members, particularly when they are in need’ (9). Fine words, but they beg the question (to which Marx had a good answer): how far is this compatible with the political economy of contemporary capitalism? As it turns out, the principal feature of what follows is that BanerDu shy away repeatedly from addressing this question honestly, rarely touching directly on key features of contemporary political economy, and indeed of 'hard times'. And when they do, they quickly back away. As it turns out, they do not want to think too much about capitalism, and they seem to have no idea how it works.
So to the substance of the book, with an emphasis, for reasons that will become apparent, on the topics of migration and trade. On migration, BanerDu make two arguments. First, that on available evidence, a influx of migrants does not lead to lower wages for local workers, and second, that far from migration being excessive, people are generally very reluctant to leave home, so there is far too little of it, whether internal or international, for economic efficiency or overall welfare. In policy terms, their approach sticks faithfully to the positions of the World Bank and the OECD (both far more supportive of migration than their member governments), so that little is unorthodox or new. But they play fast and loose with evidence, and conspicuously fail to address key issues head on. So the chapter opens with a swipe at 'President Donald Trump's imaginary but enormously consequential hordes of murderous Mexican migrants and the anti-foreigner rhetoric of the Alternative for Germany, the French Rassemblement National, and the Brexit crew, not to mention the ruling parties in Italy, Hungary and Slovakia' (10), but BanerDu offer no discussion or corrective analysis of either the flow of migrants into the United States, or movements of workers within the European Union. Anyone expecting a liberal perspective on economic migration in the contemporary world, let alone a critical one, will be disappointed. Instead, they profile a debate among academic economists which takes as its starting point the demonstration by David Card that the influx of migrants from Cuba to Florida at the time of the Mariel boatlift of 1980 had no downward impact upon wages (Card, 1990), and make very brief reference to a handful of other studies, the most recent of which concerns the 'large influx of immigrants from countries as diverse as Bosnia, Afghanistan, Somalia, Iraq, Iran, Vietnam, Sri Lanka and Lebanon' into Denmark between 1994 and 1998 (Foged and Peri, 2016). I have no interest in making the argument that such influxes drive wages down. What is at issue is whether the way in which BanerDu make the argument is relevant, even-handed, and trustworthy. So it is to the point that neither of these studies addressed economic migration (the Danish case involved a policy of deliberate dispersal of refugees across the country). Equally, it is a concern that there is no mention of a later and far more widely based paper by Card (drawing on the 1990 Census in the United States), which similarly found 'relatively small effects on the relative wage structure' from even high levels of immigration, but also found that: 'Inflows of new immigrants are associated with lower employment rates among natives and earlier immigrants ... The estimates imply that immigrant arrivals between 1985 and 1990 depressed the employment rate of low-skilled natives in major US cities by 1-2 percentage points on average, and by substantially more [5-10 per cent] in high-immigrant cities' (Card, 1997, abstract). It is hard, too, to see why nothing is said regarding these issues in the long recession after 2008 (coincidentally, the last year for which Foged and Peri have data), especially as the study BanerDu cite in conclusion as confirming their position identifies the 'overall health of the economy' as a key variable (Blau and Mackie, eds, 2017: 203). And it is shocking that when they draw on that study, they flag its conclusion as being 'as close to unequivocal as you are ever going to get from a group of economists: "Empirical research in recent decades suggests that ... when measured over a period of more than ten years, the impact of emigration on the wages of natives overall is very small" (23, citing Blau and Mackie, no page reference provided) - when this is a truncated and misleading view of its findings. The full summary of its conclusions runs to three pages (ibid: 202-5); the passage they cite (from p. 204) is followed immediately by a series of qualifications, among which that some though not all studies find 'sizable negative short run wage impacts for high school dropouts, the native born workers who in many cases are the group most likely to be in direct competition for jobs with immigrants', while others suggest that 'among those with low skill levels, the negative effect on native's (sic) wages may be larger for disadvantaged minorities ... and Hispanic high school dropouts with poor English skills'; another regularity is that 'there are larger negative effects on native wages from immigrant inflows in the short run'; and although most studies find 'little effect of immigration on the employment of natives ... recent research ... does find that native teen employment measured in hours worked, but not the employment rate, is reduced by immigration. Moreover, as with wage impacts, there is evidence that the employment rate of prior immigrants is reduced by new immigration - again suggesting a higher degree of substitutability between new and prior immigrants than between new immigrants and natives' (ibid: 204-5). This is not an indictment of economic migration, as the report is on balance clearly favourable towards it. But it is a balanced perspective which takes account of all the evidence to hand, precisely the approach BanerDu promised but fail to deliver. To state the obvious, their refusal to read or present evidence with care completely undermines their claim to objectivity, and rules out any serious engagement with the politics of migration.
In their only discussion of economic migration in the US or the EU they go back to 1964 to recall the response of farmers who could previously count on 'a reliable supply of low-wage workers' to the expulsion of braceros (Mexican field hands) from California in December of that year - rather than seeking to hire native workers, they opted for mechanisation, even if they needed to switch crops in order to do so (24). Their discussion then becomes general, with the comment that migrant workers complement native workers as
'they are willing to perform tasks natives are reluctant to carry out; they mow lawns, flip burgers, attend to the needs of babies or sick people. So when there are more migrants, the price of those services tends to go down, which helps the native workers and frees them to take on other jobs. Highly skilled women, in particular, are more likely to be able to go out to work when there are many migrants around. The entry of highly skilled women to the labour market in turn boosts demand for low-skilled labour (childcare, catering, cleaning) at home or in the firms they manage or run' (25).
This is of course doubly familiar. First because it raises the issue of labour in the 'care economy', and second because in doing so it replicates precisely the perspective taken on it by the World Bank. First, the lack of any critical reflection is striking. Worse, as the chapter proceeds, a picture emerges of a fantasy world, in which employers are hesitant to hire workers without knowing something about them in case they turn out badly:
'even where laws don't make it difficult to fire a worker, firing is unpleasant at best, and potentially dangerous if the disgruntled employee becomes enraged. Therefore, most firms will not hire just anyone willing to work for them. They worry whether the worker will show up for work on time, whether the work will be up to snuff, whether they will fight with their colleagues, insult an important client, or break an expensive machine' (28).
Just what lies behind this lurid flight of fancy, I cannot say. But when BanerDu go on to state that 'employers are also reluctant to have large differences in wages within their establishments, for fear of lowering morale' (29), then trace out a line of thought that concludes with the baffling statement that: 'Once some people have connections, the market can unravel, with the consequence that most people become unemployable' (33, emphasis mine) you wonder first whether they have been led into error by the models they follow (Akerlof in this case), and second whether they know anything at all about contemporary labour markets, and particularly the record high levels of employment as a percentage of working age populations (which they actually note for the US, p. 229), and the increasingly prevalent stratification between 'permanent' core workers on the one hand, and an increasingly numerous and precarious casual workforce on the other - zero hours contracts, the dwindling away of the 'standard employment contract', and all the rest. In fact, it turns out that they do know that labour markets are fundamentally stratified ('segregated by skill level', p. 43), and they spell out that 'immigrants often end up in jobs natives do not want, or in cities no one wants to go to. There, they are not taking jobs from anyone; those jobs would remain unfilled if there were no migrants willing to take them' (29). In short, in the process of demolishing myths as they are setting out here to do, BanerDu bring to light some fundamental truths about global labour markets, but seem unconcerned to reflect on them at all critically. Instead, they are at one with the World Bank in seeking to reshape risk to maximise the size and flexibility of the global proletariat, keenly promoting technical ruses that overcome the conservative tendency to loss aversion and encourage workers to move (37-42). And they end the chapter with a focus on obstacles to internal mobility in the United States, where high housing costs and the cost of leaving local support networks mean that less well educated and low-skilled workers 'are often unable or unwilling to move, within and outside the country of their birth, to take advantage of economic opportunities'. 'Does that suggest', they ask, 'that a forward-looking government should reward people who move and perhaps even penalize those who refuse to?' (47). They opt for the first of these alternatives. Given that national and international mobility enables economies to absorb crises and adapt to structural transformation, procedures should be simplified, information provided, money transfers facilitated, and possibly insurance offered against failure. But the chapter typically ends on a note of wishful thinking. The best way to make labour markets work better, they say, would be by 'easing integration' by offering housing assistance, perhaps including rent subsidies, pre-migration matching to a job, and help with childcare arrangements. This would help and perhaps encourage migrants 'while making locals more accepting' - after which they go on to document 'widespread and hostile political reactions' to immigrants in the past, without addressing how the policies they propose would avoid such reactions in the future. In sum, the significance of international migration for them is that it provides a potentially unlimited supply of low-wage labour for areas of work that native workers are unwilling to take. But they neither address the area that has proved most problematic in the past, nor show a shred of awareness of the very widely documented abuses to which international migrants are subject, even in the best-regulated legal channels of migration, let alone in the 'continuum of exploitation' that runs from genuinely voluntary migration to the shadowy world of coercion, gang-masters, trafficking, people-smuggling and the risk of death in transit (among many others, Strauss, 2013, Strauss and McGrath, 2017, Fudge, 2018, and the dozens of references therein). In short, they do not transcend their narrow focus on 'efficient labour markets', abstractly conceived in accordance with liberal principles.
I cannot deal with the rest of the book in such detail, and indeed there is no need, as the same pattern repeats. The chapter on trade ponders for ten pages over the fact that trade liberalization over the last thirty years has led to greater inequality as lower-skilled workers' wages in the developing world have not kept pace with those of the higher-skilled, in apparent contradiction to the standard Stolper-Samuelson model. They are nonchalant in the extreme in moving between the highly restrictive assumptions of the model on the one hand and the real world on the other; and whereas the previous chapter took the sudden influx of migrants to a local economy as the starting point in its exploration of wage effects, this one declines to centre the discussion on the same sudden influx into the global economy. It acknowledges the massive expansion in the size of the global proletariat over the same period only at the very end of the discussion, and then as an afterthought ('It is also true that Mexico and other Latin American countries opened up at exactly the same time when China was also opening up, and therefore they all faced competition from a more labour-abundant economy. Perhaps that was what hurt workers in these economies' (60). No shit, Sherlock, as a particular friend of mine would say. True to form, having broached one of the key aspects of the contemporary global capitalist economy, they enquire no further.
Instead, they launch into a bizarre and incongruous account of how Petia Topalova was 'black-balled by the academic elite' and driven to resort to working for the IMF, for suggesting, contrary to neo-classical theory, that 'the more exposed a particular district [in India] was to trade [after 1991], the slower poverty reduction was in that district' (62). It's an odd way into a significant literature. For a start, the theory in question assumes perfect mobility of factors (including labour), a feature that is known not to obtain in the real world - hence the liberal policy imperative, embraced by BanerDu, to increase the mobility of labour. Readers will be baffled by heavy (and entirely unsubstantiated) hints about skulduggery among peer reviewers and journal editors, in what appears to be a private spat with un-named trade economists who 'felt threatened' (64) by the work, and I can't throw much light on it myself - except to note that the paper in question was produced by Petalova while still a PhD student in the Department of Economics at MIT, and, I wouldn't mind betting, supervised by BanerDu themselves (although they don't say so). It's not unusual for a paper produced by a PhD candidate to take a while to get into a leading journal, and in any case Topalova's work was taken up very quickly (see for example Goldberg and Pavcnik, 2007, which they cite). All that is rather by the way, but their petty partisan approach entirely obscures, for readers to whom the book is supposedly directed, the policy issue that is at stake. In a section entitled 'The Sticky Economy', BanerDu note that in India 'Topalova found the negative effect of trade liberalization on poverty was exacerbated in states where strict labour laws made it very difficult to fire workers and shrink unprofitable firms, allowing profitable firms to take their place' (64), and they conclude the section by observing that she found little evidence of 'creative destruction'. So they do find their way to the long-standing position of the OECD and the World Bank, with their push for more flexible policies for the 'hiring and firing' of workers, notably in the series Going for Growth and Doing Business respectively. But they still don't convey the nature of the broader contribution of this line of analysis, which mostly runs counter to their 'stickiness' approach to argue that trade liberalisation in conjunction with the fragmentation of production creates significant niche opportunities for industrialisation in the developing world. Nina Pavcnik and Pinelopi Goldberg, the latter until 1 March 2020 Chief Economist at the World Bank, are leading figures here, and you can get a much better idea of the policy issues from their work, which BanerDu cite only in passing in support of Topalova (a joint author with them on occasions). Such is their instinct to see the world as revolving around themselves that they completely omit any reference to the paper by Pavcnik (2002) that can be credited as sparking this line of analysis into life:
'I find support for productivity improvements related to liberalized trade. I show that after trade liberalization, the productivity of plants in the import-competing sectors grew 3 to 10% more than in the nontraded-goods sectors. This finding ... suggests that exposure to foreign competition forced plants in sectors that used to be shielded from the international competition to trim their fat. ... I find that exiting plants are on average about 8% less productive than the plants that continue to produce. Although it is hard to pinpoint the exact mechanism of productivity improvements, this result implies that plant exit also contributes to the reshuffling of resources within the economy. Evidence from the industry-level aggregate productivity indices additionally suggests that the reallocation of market shares and resources from less to more efficient producers is an important channel of productivity improvements' (Pavcnik, 2002: 248).
You could certainly see this as a specific instance of 'creative destruction' if you wanted, though Pavcnik doesn't describe it as such. More to the point, the mechanism she describes is actually not so hard to pinpoint, being exactly the one that Marx identifies as driving the development of capitalism on a global scale - a mechanism in which trade has to seen as a moment in the broader process of competition-induced crisis and innovation in the world market as a whole. In a process thoroughly understood by the OECD and the World Bank, and advocated for the developed world, some firms innovate and thrive under competitive pressure, while others fail and disappear, leading to local and global increases in productivity and 'efficiency'. But BanerDu's narrow focus gives the reader no chance of appreciating this broader context, and frankly, if I weren't reviewing the book I would have put it aside at this point. Although to be fair, had I done so, I would have missed a comical account of their attempt to purchase a DVD player (68-9), which is inconsequential, but still one of their better anecdotes, and their later confession that they struggle with dressing themselves properly (219).
For the rest, then, I offer a stripped down summary and a critique. Chapter Four, on likes, wants and needs, profiles experimental data from behavioural economics to argue that people are reluctant to change their minds, but also subliminally suggestible, so are best moved towards 'better' behaviour by surreptitious nudges; Chapter Five argues that for all the academic work on growth, 'we' don't know much about why how it happens or what to do when it falters - so the burden of over sixty rambling pages is that: 'We don't understand very well what can deliver permanently faster growth. It just happens (or not)' (179). Chapter Six, 'In Hot Water' offers an anodyne consideration of climate change, arguing that it has bad consequences, especially for the poor in the developing world, without rising above the standard of an average undergraduate essay; Chapter Seven, 'Player Piano' (the reference is to Kurt Vonnegut's first novel, from 1952), starts off by talking about jobs in the context of robotisation, but turns into a gentle run through familiar data on rising inequality of incomes. Chapter Eight, 'Legit.Gov' (sic) starts out by asking how the legitimacy of the state can be restored, but over a brief and very awkward 14 pages dwells at length on corruption and ends by talking about conditional cash transfers in Mexico. It is essentially a bridge to Chapter Nine, 'Cash and Care', a discussion of social protection reform that focuses on universal basic income (UBI) as a means to encourage productivity-enhancing mobility and argues for the need to factor the 'desire to be respected' into social protection programmes.
The key to all of this is the long, rambling chapter on growth, with its conclusion that it is a mystery. The important point is not that the literature on growth is flaky (though it is), it is that BanerDu seem really to believe that orthodox theory is obsessed with growth, whereas they want to focus on well-being instead. This is not a fundamental critique (after all, it is what the OECD has been saying for years). Rather, it is a fundamental misunderstanding of the way in which neoclassical economics and its offshoots abstract away from class exploitation, and install growth as an ideology, presenting it as a universal good. This is why debates over class interest take the perverted form of debates over 'distribution'. The limitations of BanerDu's position become clear in Chapter Seven, where they present Reagan and Thatcher as elected in a time 'dominated by anxiety about the end of growth' (239), and obsessed with restoring it as 'a matter of national pride' (236). And they go on: 'For both Margaret Thatcher in the UK and Ronald Reagan in the US, what was to blame for the slump in the late-1970s was clear (though we now know they had no idea). The countries had drifted too far to the left - unions were too strong, the minimum wage was too high, taxes were too onerous, regulation was too overbearing' (ibid). Well, growth in both countries did fall briefly below zero in 1970 and, after the first oil shock, in 1974 and 1975, as it would again after the second oil shock, in 1980. But it averaged 3.3 per cent per year in the UK 1976-9, and over 4 per cent in the US. In macroeconomic terms, the major issue was inflation. There was no slump in the late 1970s. And as it happens, the UK introduced a minimum wage only in 1999. Thatcher and Reagan were not obsessed with growth, but with restoring the 'value of money' and the hegemony of capital over labour, and they were willing to sacrifice growth in the short term to do so. So it is BanerDu, rather than Thatcher and Reagan, who have 'no idea' (cf. 285-7).
And as it turns out, they have no idea either about the thinking that underpins the positions taken by the OECD and the World Bank, despite the fact that they inhabit precisely the same policy arena. So they drop into the chapter on growth a brief reference to the 2016 World Development Report, Digital Dividends, commenting that 'after much hemming and hawing, [it] concluded that on the impact of the internet, the jury was out' (187). Let's see. The Foreword began by saying: 'We find ourselves in the midst of the greatest information and communications revolution in human history', went on to say that the Report 'finds that traditional development challenges are preventing the digital revolution from fulfilling its transformative potential', and 'concludes that 'the full benefits of the information and communications transformation will not be realized unless countries continue to improve their business climate, invest in people's education and health, and promote good governance'. This is classic liberal political economy. In short, digital technologies had to be part of a programme of broader economic reforms, and the World Bank Group was 'already working with clients to promote competitive business environments, increase accountability, and upgrade education and skills-development systems to prepare people for the jobs of the future' (xiii). Two pages later, and without spotting a connection, BanerDu report two related benefits of cell phones for fishermen in Kerala - quick identification of the best markets to sell their fish, and a far more competitive market for boat-building (189-90).
So, as was the case with Poor Economics, their core policy recommendations generally echo those of the World Bank and the OECD, as we have seen with the mobility of labour: 'Some employment protection is of course necessary; workers cannot be at the whim of their employer. But labour market regulations are so stringent [in Ghana, in this case] that they really put a chokehold on any efficient allocation of resources' (200). And when they return to a contemporary policy agenda in Chapter Nine, they place themselves firmly on the current terrain of the international organizations, for whom the principal problem is that too many people around the developing world are not incorporated into the world market through 'good jobs'; they note that in India,'most people work in agriculture or on tiny firms (sic, 294); and they favour both good quality pre-school education and better day care, the latter on the grounds that: 'Expanding highly subsidized quality whole-day care is one very effective way to raise incomes among low-income women by, quite simply, making work pay' (310). All much as you would expect. But they don't have much time for the detail, preferring anecdotes and micro-level 'experiments'. it is symptomatic of this that in a chapter entitled 'Cash and Care', they have only this to say about the elderly, apparently forgetting the army of immigrants they identified at the outset:
'Working with the elderly can be challenging, and in the United States these jobs pay very little; in other words, they are not very attractive. But that again could change. We need to provide the money to hire enough people, train them adequately, ensure they have enough time to spend with each person, and pay them well enough to make them proud of the work they do' (311).
They have plenty more ideas along similar lines: 'Everyone should be able, just as four out of five Americans do, to find meaning in their jobs'; and 'We each should have a universal right to a productive life within society' (315). And for this to work, we just have to treat people with respect. Unfortunately, they don't explain how this can be compatible with the politics of global competitiveness which they endorse, let alone with the brutal global patterns of exploitation attending it with which they entirely fail to engage. Instead, they offer the thought that the 'goal of social policy, in these times of change and anxiety, is to help people absorb the shocks that affect them without allowing those shocks to affect their sense of themselves' (322). The shocks are apparently non-negotiable, so with all due respect, people must adapt.
References
Blau, Francine D. and Christopher Mackie, eds, The Economic and Fiscal Consequences of Immigration, National Academies Press, Washington DC.
Card, David. 1990. 'The Impact of the Mariel Boatlift on the Miami Labour Market', Industrial and Labour Relations Review, 45, 3, 556-572.
Card, David, 1997. 'Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration', NBER Working Paper, 5927, February.
Foged, Mette, and Giovanni Peri. 2016. 'Immigrants' Effect on Native Workers: New Analysis on Longitudinal Data', American Economic Journal: Applied Economics, 8, 2, 1-34.
Fudge, Judy, 2018. 'Illegal Working, Migrants, and Labour Exploitation in the UK', Oxford Journal of Legal Studies, 38, 3, 557–584.
Gentilini, Ugo, Margaret Grosh, Jamele Rigolini and Rusian Yemtsov, eds. 2020. Exploring Universal Basic Income: A Guide to Navigating Concepts, Evidence, and Practices, World Bank, Washington DC.
Goldberg, Pinelopi, and Nina Pavcnik, 2007, 'Distributional Effects of Globalization in Developing Countries', Journal of Economic Literature, 45, 1, 39-82.
Pavcnik, Nina, 2002. 'Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants', Review of Economic Studies, 69, 1, 245-276.
Strauss, Kendra. 2013. 'Unfree Again: Social Reproduction, Flexible Labour Markets and the Resurgence of Gang Labour in the UK', Antipode, 45, 1, 180-197.
Strauss, Kendra and Siobhan McGrath, 2017. 'Temporary migration, precarious employment and unfree labour relations: Exploring the ‘continuum of exploitation’ in Canada’s Temporary Foreign Worker Program', Geoforum, 78, 199-208.