Notes

An Upbeat Foreword

1. , Economic Possibilities for our Grandchildren, in: John Maynard Keynes, Essays in Persuasion (New York: W.W. Norton and Co, 1963), p. 358–373. 2. Grzegorz W. Kolodko, Truth, Errors, and Lies: Politics and in a Volatile World (New York: Columbia University Press, 2011) (paperback 2012). Russian, Chinese, Arabic and other language editions see http://www. tiger.edu.pl/english/kolodko/ ksiazki.htm.

1 A Truthful Economics, or What Modern Economics is – and What it Should Be

1. John Lehrer, “The Truth Wears Off”, The New Yorker, December 13, 2010. 2. Nouriel Roubini and Stephen Mihm, Crisis Economics. A Crash Course in the Future of Finance (New York: The Penguin Press, 2010). 3. Edmund S. Phelps, Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change (New York: Princeton University Press, 2013). 4. Richard A. Posner, A Failure of Capitalism: The Crisis of ’08 and the Descent into Depression (Cambridge, MA and London, England: Harvard University Press, 2009). 5. Vito Tanzi, Dollars, Euros, and Debts. How We Got into the Fiscal Crisis and How We Get Out of It (New York: Palgrave Macmillan, 2013). 6. Daniel Kahneman, Thinking, Fast and Slow (New York: Farrar, Strauss and Giroux, 2011). 7. David Freedman, Wrong: Why Experts Keep Failing Us – And How to Know When Not to Trust Them (New York, Boston and London: Little, Brown and Company, 2010), and Kathryn Schultz, Being Wrong: Adventures in the Margin of Error (New York: Ecco, 2010). 8. Obama, “Shootings Should Prompt ‘Soul-searching’”, USA Today, August 6, 2012. 9. A certain Mr. Pratt of Gun Owners of America said: “Where the guns are allowed freely to be carried... we have very low murder rates”. BBC News, “Piers Morgan: Thousands Petition for Deportation” (http://www.bbc.co.uk/ news/entertainment-arts-20838729). 10. Paul Slovic, Baruch Fischhoff and Sarah Lichtenstein, “Facts and Fears: Societal Perception of Risk”, Advances in Consumer Research, vol. 08, 1981. 11. See Anna-Marie Lever, “Walnuts ‘Improve Sperm Health’ ”, BBC online, August 16, 2012. 12. Read more in: Tomáš Sedláček, Economics of Good and Evil: The Quest for Economic Meaning from Gilgamesh to Wall Street (Oxford and New York: Oxford University Press, 2011). The author, starting his deliberations from the Sumerian story,

211 212 Notes

limits himself to the Judeo-Greek-Christian culture, overlooking the presence of the issue of good and evil in other philosophies and religions, especially in Taoism, Confucianism, Hinduism, Buddhism and Islam, which are the cultures of over half of mankind. The Christian culture is just a third of it. 13. Olivier Blanchard, “Global Economy: Some Bad News and Some Hope”, iMFdirect. The International Monetary Fund’s global economy forum, Washington, DC, October 8, 2012. 14. Richard Wilkinson and Kate Picket, The Spirit Level: Why Greater Equality Makes Societies Stronger (New York: Bloomsbury Press, 2009). 15. See data provided by Vito Tanzi and Ludger Schuknecht, “The Growth of Government and the Reform of the State in Industrial Countries”, IMF Working Papers, 95/130, Washington DC, 1995. See also Grzegorz W. Kolodko, From Shock to Therapy. of Postsocialist Transformation (Oxford and New York: Oxford University Press, 2000). 16. Vito Tanzi, Government versus Markets. The Changing Economic Role of the State, (New York: Cambridge University Press, 2011). This is the work from which I borrowed the data I quote, the source of which is the IMF and the EU for public spending and Luxemburg Income Study for the Gini index. 17. Two American authors write about their own experience of evidently neolib- eral practices and how they feel about being involved in them: John Perkins, Confessions of an Economic Hit Man (San Francisco: Berrett-Koehler Publishers, 2004) and John C. Bogle, Enough: True Measures of Money, Business, and Life (Hoboken, NJ: John Wiley and Sons, 2009). 18. John Maynard Keynes, The General of Employment, Interest and Money (London: Macmillan, 1960).

2 A Blueprint for the Future

1. Star Wars, directed by George Lucas, Lucasfilm & 20th Century Fox, San Francisco-Los Angeles 1977. 2. Matthew Glass, Ultimatum (New York: Atlantic Monthly Press, 2009). 3. Oscar Wilde, Lord Arthur Savile’s Crime and Other Stories (New York: Penguin Books, 1994). 4. Adair Turner, “Securitisation, Shadow Banking, and the Value of Financial Innovation”, “The Rostov Lecture on International Affairs”, School of Advanced International Studies (SAIS), John Hopkins University, Washington, DC, April 19 2012. 5. John Cassidy, “What Good Is Wall Street?”, The New Yorker, November 29, 2010. See also by this author: How Markets Fail: The Logic of Economic Calamities (New York: Farrar, Straus and Giroux, 2009).

3 On Employing Economics to Shape Reality

1. Vernon L. Smith, Bargaining and Market Behavior: Essays in Experimental Economics (Cambridge, UK: Cambridge University Press, 2000). 2. See Daniel Kahneman, Thinking…, op. cit., p. 269. 3. Richard H. Thaler and Cass R. Sustain, Nudge: Improving Decisions About Health, Wealth and Happiness (New Haven and London: Yale University Press, 2008). Notes 213

4. William Easterly, The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics (Cambridge, MA: MIT Press, 2002). See also a book by the same author The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good (Oxford and New York: Oxford University Press, 2006). 5. Yang Jisheng, Tombstone: The Great Chinese Famine 1958–1962 (New York: Farrar, Straus and Giroux, 2012). 6. Quoted after “JP Morgan ‘may pay record $13bn fine’”, BBC online, October 20, 2013 (http://www.bbc.co.uk/news/business-24599345). 7. Richard E. Nisbett, The Geography of Thought. How Asians and Westerners Think Differently… and Why (New York: Free Press 2003).

4 – an Accident of History?

1. Francis Fukuyama, The End of History and the Last Man (New York: Free Press, 1992). 2. Christopher M. Andrew and Vasili Mitrokhin, The World Was Going Our Way. The KGB and the Battle for the Third World (New York: Basic Books, 2005). 3. Pankaj Ghemawat, World 3.0: Global Prosperity and How to Achieve It (Cambridge, Mass.: Harvard Business Review Press, 2011). 4. The process of financial crisis circumstances growing in the USA is beauti- fully presented in Inside Job, directed by Charles Ferguson, Sony Pictures Classics 2010. This motion picture won the Oscar for the best documentary film in 2011. 5. Joseph E. Stiglitz, Freefall: America, Free Markets, and the Sinking of the World Economy (New York: Farrar, Straus and Giroux, 2010). 6. Gerald A. Epstein, ed., Financialization and the World Economy (Cheltenham, UK: Edward Elgar Publishing, 2007). 7. Hereinafter, unless I specify that I mean the Republic of the Congo with a capital in Brazzaville, the Democratic Republic of the Congo shall be referred to in short as the Congo. 8. Eui-Gak Hwang, The Korean Economies: a Comparison of North and South (Oxford: Clarendon Press, 1993). 9. “Parallel Economies What the North and South Koreans Can Learn from the Reunification of Germany”, The Economist, December 29, 2010. 10. Vladimir Ilyich Lenin, Imperialism, the Highest Stage of Capitalism (New York: Penguin Books, 2010). 11. “Bombing Iran”, The Economist, February 25, 2012. 12. Dani Rodrik, The Globalization Paradox: Democracy and the Future of the World Economy (New York and London: W. W. Norton, 2011). 13. Opinion of an expert from research and advisory company Gartner cited in “The World is What You Make of It”, special report “Technology and Geography”, The Economist, October 27, 2012. 14. Extensive information about the Millennium Development Goals, about the progress achieved and factors underlying lack thereof, as well as about preparations for further measures in that respect is provided on the special UN online portal, available at www.un.org/millenniumgoals. See also The Millennium Development Goals Report 2011 (New York: United Nations, 2011). 15. See Dani Rodrik, The Globalization Paradox…, op. cit., p. 200 and next. 214 Notes

16. I exclude from this ranking the mini-states, such as Liechtenstein, Andorra and San Marino as well as territories without formal independent country status, officially recognized under international law, such as Hong Kong, Macao and Taiwan, and some enclaves, mainly insular ones, from the Cayman Islands in the Caribbean to Jersey in the English Channel. 17. Detailed data are available for 187 countries. See the UN report: Human Development Report 2011. Sustainability and Equity – A Better Future for All (New York: United Nations Development Programme (UNDP), 2011). 18. Grzegorz W. Kolodko, Globalization and Catching-up In Transition Economies (Rochester, NY, and Woodbridge, Suffolk, UK: University of Rochester Press, 2002).

5 Market Versus Government in an Age of Globalization

1. , The Wealth of Nations (Amherst, NY: Prometheus Books, 1991). 2. Adam Smith, The Theory of Moral Sentiments (Calgary: Theophania Publishers, 2012). 3. Nicholas Phillipson, Adam Smith: An Enlightened Life (New Haven & New York: Yale University Press, 2010). 4. Emma Rothschild, Economic Sentiments: Adam Smith, Condorcet and the Enlightenment (Cambridge, Mass.: Harvard University Press, 2001). 5. Michał Kalecki’s contribution to is described at length by Mario D. Nuti in “Kalecki and Keynes revisited: Two original approaches to demand-determined income – and much more besides”, in: Zdzisław L. Sadowski and Adam Szeworski, eds. , Kalecki’s Economics Today (London: Routledge, 2004). 6. Vito Tanzi, Government versus Markets…, op. cit., p. 48. 7. Robert Skidelsky, Keynes: The Return of the Master (New York: Perseus Books, 2009). 8. Daniel Stedman Jones, Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics (Princeton, NJ: Princeton University Press, 2012). 9. See: DHL Global Connectedness Index 2012, (http://www.dhl.com/en/about_us/ logistics_insights/global_connectedness_index_2012/gci_results.html). 10. Geoffrey Garrett, Partisan Politics in the Global Economy (Cambridge, UK: Cambridge University Press, 1998), and “Globalization and Government Spending Around the World”, Estudio/Working Paper 2000/155, October 2000. 11. Dani Rodrik, “Why Do More Open Economies Have Bigger Government?”, Journal of Political Economy, Vol. 106, No. 5, October 1998. 12. Therefore, I am inclined to agree with the distinguished Chinese economist and former World Bank Chief Economist and Senior Vice President for Development Economics who also is not in favor of a new consensus. See Yifu Justin Lin, “Against the Consensus. Reflections on the Great Recession” (New York: Cambridge University Press, 2013). 13. Ian Bremmer, The End of the Free Market: Who Wins the War Between States and Corporations? (New York: Portfolio, 2010). 14. Dave Eggers, The Circle (New York and Toronto: Knopf 2013). 15. Hermann Simon, Hidden Champions of the Twenty-First Century: The Success Strategies of Unknown World Market Leaders (Dordrecht, Heidelberg, London and New York: Springer 2009). Notes 215

16. Respective sources provide slightly different data. The indices quoted here are estimates for 2012, for France, based on the statistics from Eurostat, a statistical agency of the European Commission and for the United States, based on “US Government Spending”. 17. Alberto Alesina, Edward L. Glaeser, Bruce Sacerdote and Eliana La Ferrera, “Ethnic Diversity and Economic Performance”, Journal of Economic Literature, Vol. 43, No. 3, 2005.

6 Economy Without Values is Like Life Without Sense

1. I first wrote about the Twelve Great Issues for the Future in Truth, Errors, and Lies…, op. cit., pp. 338–420. 2. John Cassidy, “Prophet Motive. The Economies of the Arab World Lag Behind the West: Is Islam to Blame?”, The New Yorker, February 28, 2011. 3. Humphrey Hawksley, Democracy Kills: What’s So Good About the Vote? (London: Macmillan, 2009). 4. Freedom in the World 2010: Global Erosion of Freedom (Washington, DC: Freedom House, 2010). 5. Morton H. Helperin, Joseph T. Siegle and Michael M. Weinstein, The Democracy Advantage: How Democracies Promote Prosperity and Peace (New York: Routledge, 2005). 6. See, inter alia, Stuart P. Green, Lying, Cheating, and Stealing: A Moral Theory of White-Collar Crime (Oxford: Oxford University Press, 2006) and Clyde Prestowitz, The Betrayal of American Prosperity: Free Market Delusions, America’s Decline, and How We Must Compete in the Post-Dollar Era (New York: Free Press, 2010). 7. Frederick Engels, Anti-Dühring. Herr Eugen Dühring’s Revolution in Science (Moscow: Progress Publishers, 1947). 8. David Rothkopf, Superclass: The Global Power Elite and the World They Are Making (New York: Farrar, Straus and Giroux, 2008). 9. “The visible hand”, The Economist, January 21, 2012.

7 International Agreements and Disagreements

1. Grzegorz W. Kolodko, “The Warsaw Initiative”, Roubini Global Economics, May 9, 2011 (http://www.economonitor.com/blog/2011/05/the-warsaw-initiative/) and “The Warsaw Initiative”, Let’s Talk Development. A blog hosted by the World Bank Chief Economist, May 11, 2011 (http://blogs.worldbank.org/ developmenttalk/the-warsaw-initiative). 2. “Small change”, The New Yorker, October 4, 2010, p. 46. Index

Abkhazia 84 Bahamas 199 acupuncture 4–5 Bahrain 197 advisors 59 Baltic states 166 Afghanistan 83, 144, 170, 194 see also individual countries African Development Bank 101 Bangladesh 152, 194 African Financial Community 106 banking 15, 21, 88, 143 Akerlof, George A. 123 Barbados 199 Al-Qaeda 208 Barclays Bank 52 Algeria 96, 198 Basel III 143 alterglobalists 161–2 9, 19, 37–8, alternative history 73–5 60, 120 American Rifle Association 12 Belarus 187, 195 Americanization 99 Belgium 27, 194 Amnesty International 208 Gini index 28 anarcho-capitalism 24 Belize 199 Andorra 199 Benin 197 Angola 96, 197 beyond-GDP economy 33, 35 anti-government organizations 203 Bhutan 194 antiglobalists 161, 162, 183 bias 7, 13 Antigua and Barbuda 199 big government 18, 27, 28, 137, 149 Apple 103 Bill and Melinda Gates Foundation 206 Aquinas, Thomas vii Blair, Tony 74 Arab Maghreb Union (AMU) 198, 201 Bolivia 195 Arab Spring 114, 134, 162, 165, border controls 136, 140 169–70, 171, 198 Botswana 197 Argentina 82, 175, 187, 195 Brazil 91, 130, 155, 187, 195 Aristotle vii Bretton Woods 191 Armenia 195 Bulgaria 194 Asian Development Bank 101 Burkina Faso 197 assets 51, 166, 187 Burundi 198 Association of South East Asian Nations (ASEAN) 190, 193, Cambodia 196 196, 201 Cameroon 198 assumptions 4, 8, 38, 41, 47, 61 Canada 99 errors in 26, 33 Cape Verde 197 Athens Treaty 53 capital flows 88, 116 Australia 27, 89, 113, 130, 196 capitalism 8, 71, 84, 93–4, 140, Gini index 28 167, 168 Austria 194 anarcho-capitalism 24 Austrian school 125, 168 casino 88 autonomy 129, 138 free market 71, 124, 168 axiology 16, 132 neoliberal 132, 174 Azerbaijan 195 state 82, 84, 186–7

216 Index 217

Caribbean Community and Common currency wars 64–5, 106 Market (CARICOM) 193, cyclical optimism 175 198–9, 201 cyclical pessimism 168 Carter, Jimmy 182 Cyprus 194 casino capitalism 88 Czech Republic 82, 173, 194 Central African Republic 198 Central and Eastern Europe 166, de-nationalization 139–40 168, 170 decentralization 129–30, 141 see also individual countries decision-making 62–3, 65, 76, 129, Chad 83, 198 141, 183, 201–2 change 66–7 demand 14, 20, 49 Chavez, Hugo 182 demand inflation 49 Chicago school 125 demand-side economics 126 Chile 82, 114, 195 democracy 98, 105–6, 129, 142, China 64–5, 79, 82, 84, 89, 90, 95, 170–2, 181–3 124, 133, 163, 165, 175, 185, 187, and economic growth 172 199–200, 201 Denmark 194 GCI 127 Gini index 28 Great Leap Forward 64 descriptive economics 64, 67, 68 Churchill, Winston 69 developing countries 89 climate change 80, 139, 153, 192 see also emerging markets Clinton, Bill 74 devolution 130, 138 coercion 31 disease 139 collateralized debt obligations dishonesty 32 (CDOs) 51 disinformation 11 Colombia 195 divergence 84, 85 Commonwealth of Independent diversity 138 States (CIS) 195–6, 199, 201 doctrinaires 17–18 compensation hypothesis 128–9 dogmas 17–18 competitiveness 27, 91 Dominica 199 conflict of interest 17, 41 doomsaying 56 Congo 90, 113, 197, 198 double asymmetry 20–1 consumption 17 Dow Jones index 44 continuity 66–7 convergence 84 East African Community 198, 201 EU criteria 53–4 Econ model 61, 120 institutional 114 Economic Community of Central Cooperation Council for the Arab African States (ECCAS) 201 States of the Gulf (CCASG) 197 Economic Community of West corporate social responsibility (CSR) African States (ECOWAS) 178–80 197–8, 201 Côte d’Ivoire 83, 197 economic growth vii, 25, 27, 87, created future 67–8 115, 120 creative thinking 73 and democracy 172 credit default swaps (CDS) 51 see also globalization Croatia 114, 194 Economic and Monetary Community Cuba 165–6 of Central Africa (CEMAC) 198 cultural context 4–5 economic patriotism see currency speculation 106 protectionism 218 Index economic theory 3, 14, 80 Fiji 196 public understanding of 6–7 financial crisis 43, 48, 64, 71, 131–2 economists 4, 39–41 financial markets 50, 81 Ecuador 195 deregulation 24, 72, 88 efficiency hypothesis 128 globalization 87–8 Egypt 169, 198 financial regulation 21–2 elites 171, 173, 183 financial sector 88 emancipating economies 111–12, 115, Financial Services Authority 50 185, 186 financialization 88 emerging markets 63, 79, 82, 88, 110, Finland 194 111, 134, 167, 182, 187 First World countries 82, 135 employment 27, 52, 67, 102, 121, fiscal adjustment 25 141, 166, 188 fiscal consolidation 25 Engels, Frederick 174 fiscal deficit 125–6 entrepreneurship 105, 150, 166 fiscal policy 24–5 environmental tax 153 flexible planning 77 Equatorial Guinea 198 forecasting 43–5, 48–9, 50–1, 55, 56–7 Estonia 54, 97, 112, 163, 194 interest rates 53 ethics 18, 71–2, 179 quasi-forecasts 52 corporate social responsibility self-fulfilling forecasts 49, 52, 53, 178–80 55–6 Ethiopia 152 warning forecasts 48–9, 56, 74 EU see European Union foresight 57–8 Eurasian Commonwealth of technological 58, 78 Independent States (CIS) 195 Fourth World countries 82–3, 135 European Central Bank (ECB) 56, 64 France 25, 27, 91, 142, 148, 194 European Economic Area (EEA) 199 free market 71, 124, 168, 175 European Federation of Financial free trade 92, 97, 100, 144 Analysts Societies 7 Friedman, Milton 122, 123 European Union (EU) 19, 53, 64, 77, Fukuyama, Francis 84 80, 90, 98, 102, 106, 110, 131, future studies 43–5, 68–9 133, 139, 156, 190, 194, 200 convergence criteria 53–4, 144 G-7 group 142, 184–5 finance framework 77–8 G-8 group 184–5 fiscal crisis 142 G-15 group 200–1 Stabilization and Growth Pact 144 G-20 group 185–6, 202 Eurozone 19, 53–4, 105, 125, 163 Gabon 198 exchange rates 53, 63, 133 Gambia 197 LIBOR 51–2 GCI see Global Connectedness Index expectations 45–7, 50, 52, 55, 69, GDP vii, 26, 34, 88–9, 97, 112, 128, 166–7, 176 137, 144, 148, 149–50, 152 expert assessment 58 gender studies 35–6 experts 46–7, 50–1 General Motors 103 external shocks 122 Germany 91, 97, 142, 155, 194 externalities 22 Ghana 89, 197 Gini index 28 fallacy of composition 33 Glass–Steagall Act 74 Federated States of Micronesia 196–7 GlaxoSmithKline 19 field experiments 62 global agreements 100–1 Index 219

Global Connectedness Index hypothesis testing 61–4 (GCI) 127 field experiments 62 Global Innovation Index (GII) 172 laboratory experiments 61–2 globalists 161, 162 micro-scale experiments 63 globalization 82–118, 161–2 trial-and-error 66 definition 86 Global Connectedness Index Iceland 199 (GCI) 127 ideology 69, 176–8 governance of 138–9 ignorance 46 and government 119–57 imagination 45, 47, 48, 73, 76, 81 institutionalization of 181 immigration see migration paradox 98, 109 imperialism 93 reversal 92–8 incentive 10 spread of 99–100 income 34, 89, 111, 115 government 120 income redistribution 24–5, 27, big 18, 27, 28, 137, 149 136–7, 152 decentralization 129–30 India 155, 194 global 135, 138–9 Indonesia 86, 196 local 129–30 inertia 26, 67 reduction of 150–1 inflation 15, 26, 27, 34, 49, 64, 96, size 121, 125, 127–8, 147–8, 150 122, 133, 149, 163 weakening of 129 demand 49 Gramm–Leach–Bliley Act 74 information societies 7 Great Depression viii, 43, 93, 126 instability 77 Greece 19, 25, 55, 56, 64, 194 institutional convergence 114 greed 31–2, 166–7 integration 162 greenhouse gases 140, 153 Inter-American Development Greenpeace 208 Bank 101 Grenada 199 interdisciplinary economics 39 gross domestic product see GDP interest rates 53, 56, 133 gross national income (GNI) 137 International Labour Organization gross world product (GWP) 156 (ILO) 100 Guinea 197 International Monetary Fund (IMF) Guinea-Bissau 83, 197 26, 64, 100, 134, 157, 182, 190 Gulf Cooperation Council (GCC) international organizations 102 197, 201 Internet 180 interventionism 22, 32, 75, 108, 134 Haiti 83, 199 “invisible hand” 18, 22, 120 Hayek, Friedrich von 122, 123 Iran 95–6, 144, 163, 166, 175 herding behavior 9 Iraq 83, 170, 198 heterodox economics 37, 126, 175–6 Ireland 194 honest economics 13–14, 26 irrationality 11, 151–2 Hong Kong 79, 172 gun laws 11–12 human capital 27, 78, 91, 112–14, Israel 95–6 128, 140, 152 Italy 25, 27, 114, 194 Human Development Index (HDI) 112–14 Jamaica 199 humanitarian aid 153–4 Japan 27, 90, 91, 97, 125, 196 Hungary 194 joblessness see unemployment 220 Index

Johnson, Lyndon B. 74 Malaysia 79, 82, 196 Jordan 198 Maldives 194 Mali 83, 144, 197 Kahneman, Daniel 61 Malta 194 Kalecki, Michal 121 market 120, 131 Kazakhstan 82, 195 market price 124 Kennedy, John F. 74 market response 12 Kenya 198 Marshall Islands 196 Keynes, John Maynard vii–viii, 36–7, mass media 12–13 75, 93, 120–1, 125, 126 Mauritania 198 Kiribati 196 Mauritius 197 Kosovo 84, 163 MERCOSUR 195, 199, 201 Kuwait 197 Mexico 83, 96, 130, 155, 194 Kyrgyzstan 195 micro-scale experiments 63 microeconomic rationality 32–3 laboratory experiments 61–2 Middle East 165 laissez-faireism 125, 131, 134, migration 89, 139, 140 174, 175 multi-ethnicity 155–6 language 87, 156 Millennium Development Goals Laos 196 (MDGs) 101–2, 145 Latvia 54, 112, 194 Mises, Ludwig von 124 law and order see legal standards misinformation 19–20 Lebanon 198 Moldova 195 legal standards 171, 179, 184 Monaco 199 lending 49 monetarism 122, 126 Lenin, Vladimir Ilyich 93–4 Montserrat 198 Lesotho 197 Morocco 198 liberal economics 22–3 Mozambique 197 liberalization 87, 88, 100, 111, multi-ethnicity 155–6 162, 191 multiculturalism 117, 170, 178 Liberia 197 multiplier 26 libertarianism 24 Myanmar 83, 196 LIBOR see London Interbank Offered Myrdal, Gunnar 123 Rate Libya 96, 114, 169, 198 Namibia 197 Liechtenstein 199 nation-states 108, 109 Lithuania 112, 194 national debt 126 local government 129–30 nationalism 147, 175, 176 London Interbank Offered Rate natural disasters 153 (LIBOR) 51–2 natural price 124 Luther, Martin 180 Nauru 196 Luxembourg 194 NAVIGATOR web portal xi need 14 Maastricht Treaty 53 neo-Keynesianism 126 “McDonaldization” 86 neoliberal capitalism 132, 174 macroeconomic stabilization 136 neoliberal extremism 25 Madagascar 197 neoliberalism 22–4, 30, 63, 71, 119, Malawi 197 125, 128, 133, 165, 176 Index 221

Nepal 83, 194 pessimism 168 Netherlands 27, 194 planning 57–8, 77–9 GCI 127 plunging economies 83 Gini index 28 Poland 54–5, 114, 116, 169, 194 New Pragmatism 75 PPP 34–5 New Zealand 89, 196 political economy 41, 76, 108–9 Newly Industrialized Countries political power 107 (NICs) 79 political scandal 6 NGOs 138, 146, 183, 203, 206–7, politicians 45–6, 107 208–10 Popper, Karl 124 Niger 197 populism 176 Nigeria 83, 91, 96, 130, 155, 156, 197 Portugal 194 Nobel Prize for Economics 121, 122, PPP see purchasing power parity 123, 192 pragmatism 46, 185 non-governmental organizations see predictability 43–4 NGOs price 68, 124 North American Trade Agreement price rises 49 (NAFTA) 193, 194, 200 private entrepreneurship 150, 166 North Korea 92, 165 production growth 31 Norway 27, 113, 199 productivity 67 Gini index 28 progressive economics 30–1 not-for-profit organizations 206 protectionism 92, 97, 177 psychology 60–1 Obama, Barack 12, 72, 73, 95 public assets 166 Occupy London Campaign 162 public spending 25, 125, 148, official development assistance 149–50, 152 (ODA) 137 purchasing power parity (PPP) 34, Oman 197 96, 112 open economies 92 Putin, Vladimir 185 opinion formers 6 optimism 175 Qatar 187, 197 Organisation for Economic quasi-forecasts 52 Co-operation and Development (OECD) 34–5, 128, 148 rational resource allocation 9, 15 Orwell, George ix rationality 10–11 output 67, 89 Reagan, Ronald 50, 74, 84, 122 output value 33–4 Reagonomics 125 redistribution, paradox of 28–30 Pacific Islands Forum (PIF) 196, 201 regional integration 109–10, 189–93 Pakistan 83, 194 regulation 146–7 Palau 196 relevant structural reforms 57 Papua New Guinea 130, 196 Reporters Without Borders 209 paradox of redistribution 28–30 research and development (R&D) 91 Paraguay 195 resource allocation 136 parasitism 15 resource curse 90 Pareto, Vilfredo 38–9 Robinson, Joan 92 peace 164 Rodrik, Dani 108–9 Peru 152, 195 Romania 194 222 Index

Romney, Mitt 64 South Asian Association for Regional Russia 82, 89, 96, 155, 163, 173, 175, Cooperation (SAARC) 193, 184–5, 187, 195 194–5, 201 Bolshevik Revolution 94 South East Asia crisis 64, 134 Rwanda 198 South Korea 79, 89, 91, 92, Ryan, Paul 64 113–14, 200 South Sudan 163 Saint Kitts and Nevis 199 Southern African Development Saint Lucia 199 Community (SADC) 197, 201 Saint Vincent and Grenadines 199 sovereignty 140, 147 sales tax 154 Soviet Union 82, 122, 134 Samoa 196 Sovietologists 123 San Marino 199 Spain 25, 56, 168, 194 Saudi Arabia 173, 187, 197 spam societies 7 Save Darfur Coalition 205–6 special interest groups 171, 173 Schengen Treaty 199 specialization 35 science fiction 47–8 Spence, A. Michael 123 Second World countries 82, 89, 112, Sri Lanka 83, 194 135, 152 Stabilization and Growth Pact 144 Second World War 122, 170 stagflation 122, 126 self-fulfilling forecasts 49, 52, 53, state capitalism 82, 84, 186–7 55–6 statehood 98, 129 self-interest 32, 104, 135 Stiglitz, Joseph E. 123 self-regulation 120 structural optimism 175 Senegal 197 structural pessimism 168 Serbia 173 substitution 20 Seychelles 197 Sudan 83, 198 shock therapy 18 supercomputers 38 Sierra Leone 197 supply-side economics 122, 126 silver economy 35 Swaziland 197 Singapore 79, 172, 187, 196 Sweden 27, 113, 194 Slovakia 53–4, 163, 194 Switzerland 27, 86, 199 Slovenia 53, 97, 112–13, 194 symbiosis 15 small government 18, 24, 26–7, Syria 83, 144, 169, 198 28, 125 small and medium-sized enterprises Taiwan 79, 95, 115 (SMEs) 70, 145 Tajikistan 195 Smith, Adam 119, 124 Tanzania 82, 197, 198 social cohesion 178 Tanzi, Vito 122 social exclusion 132, 166, 176 taxation 15–16, 18, 26, 133, 140, 147, social extremism 25 149, 152–3, 207 social rationality 32 environmental tax 153 social spending 122 reduction 151 socialism 75, 85, 92, 124, 165–8, 205 tax burden 152 Solomon Islands 196 technical progress 164–5 Somalia 83, 144 technological foresight 58, 78 South Africa 173, 187 technological progress 57 South African Republic (SAR) technology 91 197, 202 terrorism 144, 183 Index 223

Thatcher, Margaret 74 urban planning 76–7 Thatcherism 125 Uruguay 195 theoretical economics 38 USA 25, 27, 125, 132–3, 148, 155 think-tanks 124–5 Americanization 99 Third World countries 82, 89, 112, GCI 127 135, 152 Gini index 28 see also emerging markets Glass-Steagall Act 74 Tobin tax 142, 154, 190 Gramm-Leach-Bliley Act 74 Togo 197 irrationality 151–2 tolerance 86 “McDonaldization” 86 Tonga 196 USSR see Russia too big to fail 88 Uzbekistan 187, 195 totalization 86 toxic assets 51 values 16, 161–88 trade 87 western 169, 170 transnational corporations 103–4 Vanuatu 196 self-interest 104, 135 Vatican 199 Transparency International 208 Venezuela 96, 175, 182, 195 trial-and-error 66 Vietnam 79, 115, 165, 175, 196 Trinidad and Tobago 199 vision 180–1 troika 64 truth 4–5, 18 Wall Street 50, 146, 173 Tunisia 173, 198 war 164 Turkmenistan 173, 195 warning forecasts 48–9, 56, 74 Turner, Lord Adair 50 Warsaw Initiative 192–3 Tuvalu 196 Washington Consensus 125, 134 Twelve Great Issues for the Future Weinberger, Caspar 84 (TGIF) 163, 164 welfare state 122, 203 western values 169, 170 Uganda 198 women’s rights 140 UK 25, 125, 130, 194 World Bank (WB) 101, 137, 157, 182 Financial Services Authority 50 World Economic Forums 104, 146 Gini index 28 world Health Organisation Occupy London Campaign 162 (WHO) 206 Ukraine 195 world income 156 unavoidable future 67–8 World Social Forum 146 uncertainty 44, 59, 77 World Trade Organization (WTO) 97, unemployment 26, 67 100, 144, 182 growth in 67 worldlization 86 United Arab Emirates 197 United Nations Development Yeltsin, Boris 185 Program (UNDP) 113 Yemen 83, 198 United Nations Organization (UN) 101, 156–7, 182, 191 Zambia 197 unpredictability 44 Zimbabwe 83, 113, 173, 197