The industrial policy moment, the mining deadlock, good sex as body horror & the future of liberalism.
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Eros 1969 Shomei Tomatsu (Japanese, 1930–2012)
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Crushing the Iranian economy
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The industrial policy moment
How to think about industrial policy by Dani Rodrik at Unhedged in the FT
Dani Rodrik: I don’t think the evidence justifies such a broad-brush rejection of industrial policy. Industrial policy is just like any other policy. Yes, it can be inefficient. It can be captured. But that’s not unique. Education policy can be captured by powerful teachers’ unions. Macroeconomic policy can be captured by financial interests. Infrastructure or health policy can be captured by special interests. So that sort of broad-brush generalisation isn’t based on either the economics of industrial policy or the evidence. I think it’s more an ideological predisposition about the role of government.
The New Economics of Industrial Policy, Réka Juhász, Nathan Lane, and Dani Rodrik
There are few economic policies that generate more kneejerk opposition from economists than industrial policy. This has not stopped governments from making abundant use of it, even when they seem ideologically hostile to it.2 The salience of industrial policy has risen greatly in recent years, as governments have increasingly engaged in self-conscious industrial policies as they address a variety of problems – the green transition, resilience of supply chains, the challenge of good jobs, and geopolitical competition with China. Academic economists have often acted as by-standers (and often naysayers) as policies such as the CHIPS and IRA acts in the U.S. have been developed and implemented. The good news is that there is much to be learned from the variety of industrial policies around the world. A considerable literature has developed in recent years providing rigorous evidence on how industrial policy really works and how it shapes economic activity. This literature is a significant improvement over the earlier generation of empirical work, which was largely correlatioonal and marred by interpretational problems. The recent crop of papers offers in general a more positive take on industrial policy. More importantly, it provides a much more nuanced and contextual understanding of industrial policy. It enables economists to engage in the debates around industrial policy in a more productive manner, shedding light rather than heat.
Source: Harvard
Mining roadblock
Mining companies have spent much of the past decade in investors’ bad books. Throughout the 2000s and early 2010s the industry, betting that the surge in commodity prices brought on by China’s economic rise would persist, splurged on investments and racked up hefty debts in the process. At the height of the frenzy in 2013 the combined capital expenditure of the world’s 40 largest mining firms by market value reached $130bn, according to pwc, an advisory firm, nearly four-fifths of their earnings before interest, tax, depreciation and amortisation (ebitda). That spending spree left mining bosses red-faced as economic growth in China slowed, causing commodity prices—and the industry’s profits—to plummet. Miners spent the years that followed cleaning up the mess. In 2015 more than $50bn-worth of assets were written down. bhp, the world’s most valuable mining firm, spun off its least-loved sites to raise money and simplify its business. Others followed suit. Cash was used to pay off debts instead of financing new projects.
Since then, profits in the industry have recovered. But investment has not. In 2022 the 40 largest miners together invested $75bn, equivalent to a mere quarter of ebitda (see chart 1). bhp, which on February 20th reported its results for the second half of 2023, invested $8.8bn last year—less than half as much as it spent in 2013. Other big miners remain tight-fisted, too. That is a problem. Decarbonising the global economy will require 6.5bn tonnes of metal between now and 2050, according to the Energy Transitions Commission, a think-tank. Although much attention has been paid to the lithium and nickel needed for batteries, they are only one part of the picture. Fully 170m tonnes a year of steel, made mostly of iron ore, will be needed for everything from wind turbines to electric vehicles—more than ten times current global production. Vast amounts of copper will be required to expand and upgrade electricity grids. Demand for aluminium, cobalt, graphite and platinum will rise substantially, too. That will require a lot of blasting and drilling, which must begin now. Why isn’t it happening? One reason miners are reluctant to loosen the purse-strings is that they are still trying to win back the confidence of investors. The value of the msci world metals and mining index, which tracks share prices in the industry, has risen by about 10% in the past decade, compared with a doubling in the world’s stockmarkets as a whole (see chart 2). Returns on new projects in the industry are currently around 7%. That is hard to sell to investors when the yield on investment-grade corporate bonds in America is above 5%.
Source: Economist
Powering AI
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Nagasaki 1961, Shomei Tomatsu (Japanese, 1930–2012) Source: Philadelphia Art Museum
All Good Sex Is Body Horror The work of the director David Cronenberg proposes that transformation can attend disgust and that our desires might be elevated only when we are torn apart. By Becca Rothfeld
. “People . . . never quite feel that they are securely embedded in their social context,” Cronenberg has observed. “They always feel that the slightest little thing is going to jar them loose, and they’re going to be hopping around,” drinking one another’s blood. But there is another reason that the tenuousness of social nicety is so tantalizing—namely, that the frailty of our present mode of being hints at the possibility of its reinvention. The staid apartment dwellers in “Shivers,” Cronenberg explains, experience horror because they are still standard, straightforward members of the middle-class high-rise generation. . . . They’re bound to resist. I mean, they’re going to be dragged kicking and screaming into this new experience. They’re not going to go willingly. But underneath, there is something else. This “something else” is a new orientation that vindicates their transformation only once it has taken place. The middle-class high-rise generation is not wrong to fear its salvation from ossification, for a self on the verge of metamorphosis is also on the verge of liquidation.
Source: New Yorker
Agency doesn’t just materialize—the conditions for it must be built.
What Happened to Liberalism? Becca Rothfeld speaks with Samuel Moyn about his book Liberalism Against Itself and why liberalism is in crisis.
Becca Rothfeld: The first question I wanted to ask is how to improve liberalism. Despite some misreadings of Liberalism Against Itself as illiberal, it’s very much not an anti-liberal book. It’s a book that’s disappointed with the direction that postwar liberalism has taken, but it’s also cautiously optimistic about the liberal tradition’s ability to redeem itself. Tallying up your objections to Cold War liberalism in the book, I noticed that it was possible to construct a better ideal of postwar liberalism by imagining a sort of mirror image of the failed liberalism you describe. Could you say a little bit about the positive conception of liberalism glinting in the background of the book?
Samuel Moyn: This book is a series of portraits of liberals in the middle of the twentieth century, and I take a pretty deflationary view of the politics that they wrought. I claim that they introduced a rupture in the history of liberalism. I do imply that they’ve left us, at least in part, in our current situation, intellectually and even practically. I don’t know if I would agree that I’m optimistic about liberalism: I would say that there are resources from the past to draw on before Cold War liberalism that could be used to argue for a new liberalism. But I certainly think that we need to give tough love to liberals, not just for their abuse of their own tradition, but also because they seem recurrently incapable of confronting some nagging criticisms of their platform. You’re right that I do suggest (albeit indirectly) some laudatory features of liberalism before it became transmogrified through the Cold War liberals. I’ll mention a few. The first half of the book is about what liberalism was before Cold War liberals abandoned its core motivation—human emancipation. I start out with a chapter on the Enlightenment that defines the epoch through its promotion of emancipation from the ruins of authority and tradition. But a much bigger component of Liberalism Against Itself is the contrast I draw between the self-perfectionism of the Enlightenment and the tolerationism that surged through the careers of more recent liberals like John Rawls. In the beginning, liberals were total perfectionists. They offered a novel, controversial ideal of the highest life, one premised on personal fulfillment through creativity. That’s because the early liberal thinkers were also romantics, were deeply connected to the Romantic movement in literature and philosophy. Another component of early liberalism that should be resuscitated is an ethos of progress. Liberals before the middle of the twentieth century were connected to a sense that history was a forum to achieve emancipation and to construct interesting lives. Agency doesn’t just materialize—the conditions for it must be built. To the early liberals, those conditions aren’t going to appear overnight. There were a lot of reasons in the middle of the twentieth century to give up on progress—certainly the notion of inevitable progress. What I worry about is an overcorrection: that Cold War liberals lost any sense of an uplifting, radiant future to offer through policy, both locally and globally. A truly emancipatory vision for liberalism would involve reversing some of the damage of that pessimistic thinking.
Source: Boston Review
The Cold War and the Canon of Liberalism
the perspective of these lectures is left Hegelian. It’s not specifically about the welfare state, which I don’t see as—and I don’t think left Hegelians should think of as—the end of history. That being said, you’re right that American liberals are nostalgic for the New Deal or the welfare state that they understand that they didn’t get, and then idealise Denmark or Sweden. There’s no nostalgia for that in these lectures, except insofar as it shows that there were alternative liberalisms. And there’s absolutely no suggestion that we just surgically extract liberalism before the Cold War came and graft it on to our present. But we should rehabilitate some of its impulses and return to some of its thinkers as ways of extricating ourselves from the Cold War syndrome. The significance of the left Hegelian tradition is about a kind of emancipatory statism through the institutionalisation of a free community of equals who are creative agents. That’s what I think liberalism ought to be trying to bring about, which is not at all bureaucratic or technocratic. There’s a very interesting distinction that some have used, like Svetlana Boym, about different forms of nostalgia. The point is not to luxuriate about what came before, but instead to treat the past as a critical resource for getting what we’ve never had. That’s the kind of spirit of these lectures, and I really want to avoid any complacent nostalgia, where the idea is just to go back. The welfare state was eugenic in Sweden and some other countries, and deeply exclusionary everywhere, especially along lines of gender, but also (where it mattered) race. And so, the New Deal was an incredibly compromised project all the way down. It is not a credible starting point, but we do have to have a theory of emancipation through the state and history. The nineteenth century is a better resource for that approach than our politics, call it liberal or socialist or liberal-socialist, than anything we’ve seen in the last few decades.
Source: Center for Intellectual History Oxford
Does Law and Political Economy Need Theory?
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Lyn Hejinian (May 17, 1941 – February 24, 2024)
from The Fatalist: Home whose names are produced by motion
BY LYN HEJINIAN
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Sandwich Man 1961 Shomei Tomatsu (Japanese, 1930–2012)