Rethinking Our World

[Glynis Waughtal]

2The Rise of Subsidies and the Clash of Industrial Policy, moderated by Rem Korteweg from the Clingendael Institute in discussion with Olabisi Akinkugbe from Dalhousie University and Inu Manak from CFR.

The Center on Inclusive Trade and Development (CITD) held its second annual Rethinking World Trade conference on Wednesday, April 3rd. In addition to a book launch and a panel on U.S.-China relations, we hosted a panel discussion on subsidies and industrial policy. As economies around the world seek to reduce economic dependencies and enhance economic security while moving towards decarbonization, the resurgence of industrial policy, including subsidies, is evident. The panel featured Olabisi Akinkugbe, Professor of Law at Dalhousie University, and Inu Manak, the Fellow for Trade Policy at the Council on Foreign Relations. The discussion was moderated by Rem Korteweg of the Clingendael Institute.

To conclude our second annual Rethinking World Trade event, CITD Co-directors Professors Jennifer Hillman and Katrin Kuhlmann engaged in conversation with Shawn Donnan. Shawn previously served as the world trade editor for the Financial Times, where he covered global trade and development, as well as the International Monetary Fund and the World Bank. Now a senior writer at Bloomberg, Shawn weaves together the macroeconomic picture of trade and globalization, with a focus on their impact on local communities.

This article argues that if world philosophies are to remain relevant for social emancipation in the present time, they must incorporate critical reflections about the methods and sources of philosophy that were at the center of the African philosophy debates in the 1970s and 1980s. The debates that surrounded the emergence of African philosophy as an academic discipline entailed thorough and innovative methodological reflections on the role of ethnography, language, and genre in philosophical expression. These reflections critically recast the relationship between indigenous traditions and academic texts and between popular and professional philosophical expression, enabling their practitioners to re-think the important questions of what it means to philosophize and who philosophizes. My argument is that these methodological reflections from African philosophy reveal the profound and essential link between methods and content of philosophy and that they must be incorporated as key methodologies for world philosophies to tackle questions of social and political relevance in the present time.

But many of these developments stem from failed policy responses tomegatrends already in motion long before the pandemic struck. For at leasttwo decades, shifting demographics and technological upheaval have beenupending labor markets, exacerbating inequality, making jobs increasinglyprecarious, and deepening economic insecurity.

Now that the crisis is upon us, we should not waste it, as politicians liketo say. Policymakers must pursue a more dramatic course correction thanpreviously considered. They must sweep away flawed ideas about jobs andseize this emergency as an opportunity to build resilient, equitable, andsustainable economies.

Without large-scale job creation, surplus labor in developing economieswill exert downward pressure on wages and working conditions. The resultwill be not only a deteriorating quality of life but also a ceiling oneconomic growth. We cannot expect the middle class in developing economiesto keep expanding if young people cannot find jobs that pay middle-classwages.

As in previous crises, young adults have been among the first affected bythe social, educational, and economic disruption. This was borne out by asurvey of more than 12,000 young people conducted across 112 countries inApril and May, when the pandemic was spawning the worst global recessionsince World War II (see Picture This in this issue of F&D).

Reporting on the survey, the International Labour Organization (ILO) foundthat 17 percent of previously employed people between the ages of 18 and 29stopped working after the pandemic hit, and 42 percent reported a drop inincome. In the absence of pathways to productive and high-qualityemployment, developing economies that pin their economic ambitions on ademographic advantage are setting themselves up for disappointment.

As this analysis suggests, the pandemic is driving a shift toward moreinformal and precarious work among people who are just seeking to make endsmeet. Prior to the pandemic, the rise in contractual work notwithstanding, informal employment was stagnant or even declining in some countries. Butthe pandemic will likely reverse this trend. These informal workarrangements may push down unemployment in developing economies, but thejobs are less secure and tend to be lower-paying and less productive.Policymakers should not be fooled by the numbers. After the pandemic, adecline in the unemployment rate should not be mistaken for economicrecovery.

The ILO estimates that workers around the world lost $3.5 trillion in laborincome in the first three quarters of 2020 as the pandemic slashed theirhours on the job. From simply a health crisis, the pandemic has morphedinto both a health and an economic crisis, fostering uncertainty in thebusiness climate and fear among employees.

The risk, for workers, goes well beyond immediate job losses and hiringfreezes. The deeper danger is that companies will be less inclined to buildpermanent workforces, relying instead on cheaper gig, temporary, orcontractual workers.

People in informal and contractual arrangements and those who areself-employed generally do not receive social security through an employer,leaving them vulnerable to shocks such as from COVID-19. The rise ininformal employment also squanders precious productive potential andreduces consumption power, circumscribing broad-based economic development.

Third, governments should recognize that technology, like a genie freedfrom its bottle, cannot be coaxed away.But they can regulate it. This means putting public interest ahead ofcommercial interest in mandating data sharing and transparency from techcompanies that run digital platforms. Workers who sign on to such laborplatforms should have access to public benefits and services. Governmentsshould have access to the data to facilitate evidence-based policymaking.Enforcing competition law more stringently to curb the power of large and growing corporations isessential. Policymakers should revisit corporate taxation, particularly fortech companies that engage in rent seeking and labor arbitrage, to helpextend social security coverage to informal and contract workers.

Fourth, the advent of technology and changing demography in developingeconomies call for investments in reforming and updating human capitalto appropriately educate and train young people so that they are moreemployable.Moreover, as the pandemic alters the economic landscape, creatingopportunities for some sectors to thrive while weakening others,policymakers must help workers retool accordingly.

Finally, a myopic focus on boosting efficiency rather than buildingresilience leaves economies vulnerable.Government investments in health, education, public employment, and socialprotection systems have all proved their worth. So have fiscal and monetarystimulus. Although these programs can seem inefficient in good times, theyprovide the necessary space for policymakers to react quickly in uncertaintimes.

Renewable energy is a fundamental and growing part of the global energy transformation. Increasingly, renewables have become the first choice for expanding, upgrading and modernising power systems around the world.

REthinking Energy, the flagship report from the International Renewable Energy Agency (IRENA), examines trends and developments in the global quest for a sustainable energy future. As this third edition emphasises, accelerated deployment will fuel economic growth, create new employment opportunities, enhance human welfare and contribute to a climate-safe future.

As this major German bestseller reports, our world is at a tipping point, and we feel it every day. On the one hand, we have never been so well off; on the other hand, we find destruction and crisis everywhere we look. Whether throughout the environment or within society, our systems are under stress.

Critical, yet full of encouragement, Maja Gpel chooses surprising and enlightening examples to illustrate how we can leave behind our familiar ways of living to achieve a better future. With that, she invites us to look at this future we are shaping every day in a new and completely different way.

This article draws on Marxist and realist theories of international political economy to argue that a synthesis between the two is possible. In particular, it argues that despite the fact that Marxists place class as the centre of their analysis, Marxist theories on imperialism and world systems nevertheless create territorial partitions of the world which establish hierarchies of national economies. Whilst some may argue that non-state actors and global markets have decreased the significance of states in international affairs, this article argues that earlier Marxists works on world systems and imperialism are relevant today, and that the international economy continues to be hierarchical. Furthermore, it argues that large multinational corporations dominate global markets and have common interests with their host states. Thus, the economic integration of the world, spearheaded by powerful companies, helps maintain rather than undermine the international hierarchy of states.

What did Marx himself say about international relations? Whilst early plans of Capital showed his intent to discuss the international economy, Marx did not write on this topic before his death. What his writings do show, however, is that he foresaw that capitalism would become a truly global phenomenon, driven by its insatiable need for new markets for exploitation:

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