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Archive for the 'Economics' Category

In this new Intelligence² format the BBC's Evan Davis will take to the stage in the role of roving inquisitor. There'll be expert witnesses in the audience and a chance for everyone to put their question to the panel.

We're lining up eminent economists and leading figures from the worlds of business and finance for Evan to grill on the most pressing issues of the day: Just how bad an economic mess are we in? Is this the end of capitalism as we know it or just one of capitalism’s periodic upheavals that we have to survive as best we can? And what if anything can and should be done to put things back on track?

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We all know that the Chinese are the neo-colonialists of Africa. They’ve plundered the continent of its natural resources, tossing aside any concern for human rights and doing deals with some of the world’s most unsavoury regimes. The relentless pursuit of growth is China’s only spur.

But is this picture really fair? In Angola, for example, China’s low-interest loans have been tied to a scheme that has ensured that roads, schools and other infrastructure has been built. China has an impressive track record of lifting its own millions out of poverty and can do the same for Africa. And is the West’s record in Africa as glowing as we like to think? After decades of pouring aid into Africa, how much have we actually achieved in terms of reducing poverty, corruption and war? So which way should Africa look for salvation – to the West, to China, or perhaps to its own people?

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"Bliss was it in that dawn to be alive, But to be young was very heaven!" So wrote William Wordsworth at the start of the French Revolution, and that spirit of euphoria still broadly infects the young people who massed in their tens of thousands in Egypt and Tunisia to oust their hated rulers. But in countries with no tradition of democracy, where corruption is entrenched and jobs are scarce, the political and economic aspirations of these youthful revolutionaries are likely to be disappointed. Add to that the fact that the Islamists are far better organised than the liberal groups and are set to come out on top in the forthcoming elections, and things begin to look very gloomy indeed.

But is this view all too pessimistic? The fundamental barrier of fear has been removed and the new democrats are mobilising themselves to make sure that the benefits of change trickle down to all. There's even talk of a possible split amongst the Islamists between the reactionary old guard and a more open-minded younger generation. As one of the two young Egyptians taking part in this debate will argue, if their demands aren't met, "the Egyptian masses know their way back to Tahrir Square!"

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Conventional wisdom tells us that a new star will rise in the East and over the past decade all eyes have been looking towards China or India to witness the emergence of the 21st century’s new superpower. But on 22 March 2011, the IQ2 debate challenged this assumption and suggested that we look to the West. Quietly, the economies of South America have also been transforming themselves, only in their case unburdened by the dead weight of caste politics or communism. It is they, the motion suggested, that will emerge as the Superpowers of the 21st Century.

Parag Khanna asked why it was that South America has been so perennially excluded from the conversation of geopolitics? This came down, he suggested, to the naïve assumption that hegemonic power moves in cycles from East to West to East again. To the view of South America as predominantly a resource provider rather than a resource deplorer and to the continent’s historic subservience to the United States. The US has realised that South America is ‘its turn-key solution to it’s two greatest challenges: energy security and economic competitiveness’. What is more, Asia – the world’s crowded arms bazaar – is turbulent and wracked with divisions along national and ethnic fault lines. The advantage of South America, explained Roberto Jaguaribe (Brazil’s Ambassador to the UK), was that we are ‘living in the most extensive, cohesive, and homogenous region of the world’. The region is prospering, much like the US was in early 20th century, in a context of splendid, (safe and stable) isolation.

Alright, conceded the other side of the panel, progress in South America has been spectacular, but we must recognise the weaknesses that plague the continent. After all, explained Bill Emmott, ‘Argentina is usually one president away from its next default. It is the world’s champion sovereign debt defaulter. Anyone looking for worries about the Euro and future models for how you do a sovereign debt default always reaches for the file marked “Argentina” in their file.’

What is more, suggested Gideon Rachman, while we might regard Brazil as the ‘cuddly BRIC – the one that everybody likes and they give all the tournaments to,’ we mustn’t ignore the drug wars raging in Mexico and the questionable Human Rights record in Venezuela. Take no comfort from the fact that Hugo Chavez was the 2009 winner of the Muammar Gaddafi International Prize for Human Rights. ‘That’s not one that you want to keep on your mantelpiece.’

Rana Mitter and Oscar Guardiola-Rivera took the debate to the question of culture. Mitter, against the motion, pointed to the permeating influence of Mandarin and the ‘universalising cultural phenomenons’ of Bollywood and Japanese Manga anime. He suggested there simply wasn’t a South American equivalent. What about Shakira? shot back Guardiola-Rivera.

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How badly wounded is modern capitalism by the financial crisis? Is it mortal or just a flesh wound? Will the state have to expand its powers and take on new responsibilities for jobs, investment, financial regulation and redistribution as we limp out of recession? And was the success of laissez-faire of the last 30 years just illusion built on unstable mounds of borrowing? Or was real wealth-creation unleashed? Does the crisis just point to the work that still needs to be done to make the capitalist-democratic state more nimble, smaller, less bureaucratic? Will that finally demonstrate the superior values of freedom and decentralisation over authoritarian economic models to the East? Crossing swords on these pivotal issues are Anatole Kaletsky, principal economic commentator for The Times and Will Hutton, Observer columnist and author of The State We’re In.... and of course you, the Intelligence Squared audience.

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Economist Anatole Kaletsky interviewed by Tony Curzon Price

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Tony Curzon Price interviews Will Hutton ahead of next weeks event with Anatole Kaletsky.

The financial crisis only proves the strength of capitalism on Tuesday February 8th, 2011

How badly wounded is modern capitalism by the financial crisis? Is it mortal or just a flesh wound? Will the state have to expand its powers and take on new responsibilities for jobs, investment, financial regulation and redistribution as we limp out of recession? And was the success of laissez-faire of the last 30 years just illusion built on unstable mounds of borrowing? Or was real wealth-creation unleashed? Does the crisis just point to the work that still needs to be done to make the capitalist-democratic state more nimble, smaller, less bureaucratic? Will that finally demonstrate the superior values of freedom and decentralisation over authoritarian economic models to the East? Crossing swords on these pivotal issues are Anatole Kaletsky, principal economic commentator for The Times and Will Hutton, Observer columnist and author of The State We’re In.... and of course you, the Intelligence Squared audience.

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The temptations of protectionism are strong right now – both to the US with its dreadful trade balance, and China with its undervalued currency. Is it not the time to re-visit the economic dogma that free trade is unambiguously good?

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Scottish fisherman have barricaded their fishing ports in protest at Iceland and the Faroe Islands' decision to drastically increase their mackerel catch. It feels like the Cod Wars of the 1970s. Iceland has increased its catch from 363 tonnes in 2005 to 130,000 tonnes this year. The Faroese have increased their take from 26,000 tonnes to 85,000. A 20 year-old agreement between Norway, the Faroes and the EU to limit mackerel catch has fallen apart. Norway banned Icelandic and Faroese trawlers from its ports. Scottish fishermen prevented a Faroese boat from landing its catch at Peterhead, and Alex Salmond, Scotland’s first minister, denounced the mackerel grab as “anarchic”. But is Iceland really endangering mackerel stocks? Have the mackerel moved to Icelandic waters, where they are properly Iceland's property? And is the EU really such a good guardian of the ocean's fish stocks? Ian Gatt, fisherman and chief executive of the Scottish Pelagic Fisherman's Association, argues the case against Iceland.

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After the Great Depression the government's of advanced democracies started to systematically collect data on the state of the economy. Since the end of World War Two the economic performance of the government of the day has become a yard stick for success. President Bill Clinton immortalised the general sense that growth was a pre-condition for electoral victory in his now famous campaign slogan "it's the economy stupid" but there is a growing body of work suggesting that we are measuring our government's performance by the wrong standards. Nobel Prize winners Joseph Stiglitz and Amartya Sen were appointed by President Nicolas Sarkozy to a commission tasked with recommending a new set of measures for policy evaluation in France. Bhutan measures its nation according to national happiness accounts, not economic ones. This week saw the launch of LSE's mappiness project - a hi-tech attempt to measure the happiness of the UK in real time. The new science of happiness measurement is getting closer to shaping government policy - is this just the sensible replacement of bad measure, gross domestic product, for a better one, gross national happiness? Or is it getting too close to brave new world for comfort?

To debate that happiness should not be a matter for government policy are economists Paul Ormerod and Juliet Michealson.

Paul Ormerod, arguing that happiness does not play a policy role is best-selling author of many books and papers, including, Why Most Things Fail. He is a founder and director of Volterra Consulting, he has co-authored a pamphlet for the Institute of Economic Affairs called, Happiness, Economics and Public Policy.

Juliet Michaelson arguing that happiness does have a role in formulating and prioritising policy, is a research at the Centre for Well-being of the New Economics Foundation (NEF). She has worked on NEF's National Accounts of Well-being and a Happy Planet Index.

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