Edited by Thomas Hoerber · Alain Anquetil Economic Theory and Globalization Economic Theory and Globalization Thomas Hoerber · Alain Anquetil Editors Economic Theory and Globalization Editors Tomas Hoerber Alain Anquetil Ecole Supérieure des Sciences Commerciales Ecole Supérieure des Sciences Commerciales d’Angers (ESSCA) d’Angers (ESSCA) Angers, France Boulogne-Billancourt, France ISBN 978-3-030-23823-0 ISBN 978-3-030-23824-7 (eBook) https://doi.org/10.1007/978-3-030-23824-7 © Te Editor(s) (if applicable) and Te Author(s), under exclusive licence to Springer Nature Switzerland AG 2019 Tis work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifcally the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microflms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. Te use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specifc statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Te publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. Te publisher remains neutral with regard to jurisdictional claims in published maps and institutional afliations. Tis Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG Te registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Foreword Te fnancial crisis of 2008 has triggered a searching debate over the nature of globalization—the relationship between gainers and losers, between national sovereignty and internationalism. Branco Milanovic’s “elephant curve” has shown that two groups in society have gained— the emerging middle class in China and Asia (at the top of the ele- phant’s body) and the plutocracy in the west (at the top of the uplifted trunk), with losers in the lower middle and working class in the devel- oped countries (at the dip of the trunk). Although the losers in the west remain better of than their counterparts in the emerging mar- kets, their experience of relative decline or stagnation has provoked a populist backlash. At the same time, neoliberalism promoted fnan- cial globalization and wilfully imposed austerity alongside bailing out the fnancial elite whose actions caused the crisis. It is a form of hyper- globalization that departed from the embedded liberalism of the post-war order. Ten, Keynes and many economists who emerged from the eco- nomic section of the League of Nations rejected both the dominance of national policy by adherence to the gold standard that led to defa- tion and hardship for workers, and the economic nationalism of the v vi Foreword 1930s that led to trade and currency wars. Tey wanted a form of “thin” multilateralism embedded in international organizations that allowed a balance between internationalism and domestic welfare by controlling international capital fows, and subordinating fnance to production. Now, the impact of the global fnancial crisis and the populist turn of the losers of hyper-globalization, are leading to renewed interest in those earlier economists. A number of recent books have looked back to earlier writers as a counter to neoliberalism—whether it be the “Chicago plan” of Irving Fisher that proposed 100% backing of bank deposits by central bank money to remove the power of commercial bankers to create money, or Keynes’s argument in favour of capital controls, or demands to control rent-seeking frms and natural monopolies that so worried John Stuart Mill. And surely Burke’s point that “society is but a contract between the dead, the living and those yet to be born” has resonance at a time of protests about climate change. Economists grapple with the discount rate to be applied to our current use of the environment, and whether future generations can be allowed to bear the costs or whether that will lead to extinction. Te history of economic thought provides access to a wider reper- toire of ideas that were of their time but also tools for thinking about the present. Te recent study of the Nobel Prize in economics by Avner Ofer and Gabriel Soderberg has shown how its award validated a par- ticular approach and contributed to undermining a diferent, social democratic view of the subject. By providing a wider vision of econom- ics, this collection of essays provides students with a much-needed sense of perspective. Economic thinking on globalization has undergone massive changes in the past, from the zero-sum mercantilism of the seventeenth and eighteenth century rejected by Adam Smith to the open markets of Richard Cobden, and back to trade warfare of economic blocs. Keynes himself moved from one position to the other, campaigning for free trade before the First World War but advocating insular capitalism to protect domestic welfare in the 1930s, before returning to a balanced form of globalization during the debates of the Second World War. Foreword vii Tese issues are once again to the fore, and an awareness of the rich debates of the past will only help us to grapple with the present and future. Tis book answers these questions in a lively and informed way. Cambridge, UK Martin Daunton Contents Introduction 1 Tomas Hoerber and Alain Anquetil Te Social Liberalism of John Stuart Mill 19 Alain Anquetil Karl Marx’s Communism and Critique of Capital 41 Paul Prew Edmund Burke’s Liberalism 73 Tomas Hoerber Te Free Liberalism of Adam Smith 101 Alain Anquetil Economic Cycles by Josef Schumpeter 125 Assen Slim ix x Contents Te Bancor and International Trade Possibilities of John Maynard Keynes 143 David Rees Te Roots of Neoliberalism in Friedrich von Hayek 169 Tomas Hoerber Elinor Ostrom or the Revolution of the Commons 195 Fanny Verrax Te Ecological Economy of Georgescu-Roegen 221 Gabriel Weber and Ignazio Cabras Conclusion 239 Alain Anquetil and Tomas Hoerber Index 259 Notes on Contributors Prof. Alain Anquetil is Professor of Moral Philosophy and Business Ethics at ESSCA School of Management. Since 2011, he has been writ- ing a research blog on moral philosophy. His last related publication was Textes Clés de l’Ethique des Afaires, Librairie Philosophique Vrin, Paris, 2011. Prof. Ignazio Cabras is Professor of Entrepreneurship and Regional Economic Development at Newcastle Business School, Northumbria University (United Kingdom). He is also a member of EU*Asia Institute at ESSCA, School of Management, Angers. Ignazio has published exten- sively on themes such as “Social Capital”, “Community Cohesion” and “Tird Places” in various journals including Environmental and Planning (A and C), Regional Studies, Ecological Economics and Business History. Prof. Tomas Hoerber is Professor for European Studies, Director of the EU*Asia Institute and Head of the Department of International Afairs at ESSCA School of Management. His last related publication was Hayek Vs. Keynes—A Battle of Ideas, Reaktion Books, London, 2017. xi xii Notes on Contributors Prof. Paul Prew is Professor and Co-Chair of the Environmental Committee at Minnesota State University, Mankato. In 2019, he pub- lished, “Sociopoiesis: Understanding Crisis in the Capitalist World- System Trough Complexity Sciences,” in Te Oxford Handbook of Karl Marx, which he co-edited for Oxford University Press. Dr. David Rees works for the French Ministry of Agriculture at Agrocampus-Ouest, Angers. He has been a visiting lecturer at ESSCA in Economics and Politics since 1994. His research is mostly related to pedagogy, learning environments, and the use of technology for teaching. Prof. Assen Slim is Professor for International Economics, Member of the EU*Asia Institute and of the Department of International Afairs at ESSCA School of Management. He is also Professor at INALCO Paris. His last related publication was Comprendre l’économie, un enjeu citoyen, Le Cavalier Bleu, Paris, 2019. Dr. Fanny Verrax works as an independent scholar and consultant in the broad feld of sustainability and professional ethics for various organizations, including the French Ministry of Environment. She teaches related courses at ESSCA School of Management, CEA Study Abroad Paris, and the Ecole Centrale de Lyon and other institutions. Prof. Gabriel Weber is Associate Professor of International Afairs and Sustainability at ESSCA, School of Management, Bordeaux. He is a member of EU*Asia Institute. Gabriel has published on “Ecological Economics and Political Ecology” in various journals including Ecological Economics, Cleaner Production, and Business & Society. List of Figures Economic Cycles by Josef Schumpeter Fig. 1 Te cycle 130 Fig. 2 Album sales by media from 1973 to 2015 (millions of units) (Description it appears on the fgure that the album sales show a cycle for each media which seem to confrm the intuition of Vernon 138 xiii List of Tables Elinor Ostrom or the Revolution of the Commons Table 1 A typology of goods by the author, inspired by Ostrom’s work 208 Table 2 Eight design principles for sustainable common-pool resources management, based on Ostrom (1990) and Cox et al. (2010) 210 Table 3 Levels of analysis and outcomes (Adapted from Ostrom 2009, 59–61) 213 xv Introduction Thomas Hoerber and Alain Anquetil Methodological Groundwork Each chapter sets an economic theory and its creator’s key ideas and con- cepts in both a historical and a biographical context, as much as is necessary to enable the reader to understand the environment in which the economic theory was conceived.