Tag: Economics

British Study Shows Zimbabwean Land Reform “Not a Failure”

by Matthijs Krul

After years of propagandizing and venom against the strongman rule of Robert Mugabe in Zimbabwe by the Western press, a recent study at Sussex University’s Institute of Development Studies has concluded that it has in fact roughly succeeded in its goals of distributing the land more fairly among the general population, while it also is not to blame for the food problems that have struck Zimbabwe in recent years and caused a significant exodus of labor to South Africa and elsewhere.(1) While this is not to say that the stories of violence and excesses during expropriations are untrue, and while the study confirms that the Mugabe government has distributed land on nepotist and cronyist grounds as well, it concludes on the basis of research in southern Masvingo province that the latter constitutes only 5% of the people newly given land under the program. As the authors, who are British and Zimbabwean, cite in the summary of their study:

“This book challenges five myths through the examination of the field data from Masvingo province:

Myth 1 Zimbabwean land reform has been a total failure
Myth 2 The beneficiaries of Zimbabwean land reform have been largely political ‘cronies’
Myth 3 There is no investment in the new resettlements
Myth 4 Agriculture is in complete ruins creating chronic food insecurity
Myth 5 The rural economy has collapsed
By challenging these myths, and suggesting alternative policy narratives, this book presents the story as it has been observed on the ground: warts and all. What comes through very strongly is the complexity, the differences, almost farm by farm: there is no single, simple story of the Zimbabwe land reform as sometimes assumed by press reports, political commentators, or indeed much academic study.

(2) Continue reading “British Study Shows Zimbabwean Land Reform “Not a Failure”” →

How to Criticize and How Not to Criticize Positive Neoclassical Economics I: Models

by Matthijs Krul

It is a familiar refrain in criticisms of positive economics, in particular positive neoclassical economics (which indeed has by far the lion’s share of work of this kind), that it relies too strongly on unrealistic theories. Now when people speak of unrealistic theories, what they tend to mean in practice is the reliance in positive neoclassical economics on modelling, and more specifically modelling on the basis of assumptions that are known to be false. More than any other aspect of neoclassical methodology, this has come in for much criticism both from within and without the discipline of economics. It has nonetheless also had its defenders – most famously Milton Friedman, to whom is ascribed the thesis that the unrealisticness of assumptions does not matter at all as long as the theory so developed has better predictive value than any other.(1) This has also often in the minds of the critics been associated with the mathematization of modelling and economics in general that has taken place in the second half of the 20th century, and which is often seen as masking the falsehood of the models and thereby the theories by hiding it behind mathematical formulae. Yet although I think neoclassical economics is by and large poor economics and much of these things are very worth criticizing, it is important to look more closely at these matters and to separate some of the different aspects of these methodological issues and the basis for criticizing them. Continue reading “How to Criticize and How Not to Criticize Positive Neoclassical Economics I: Models” →

Rebellion mounts against ‘democratic’ India

by Matthijs Krul

Despite all the violent efforts of the Indian armies and the government death squads known as the ‘Salwa Judum’, the Naxalite rebellion in India is far from suppressed. The Indian government recently claimed victory in forcing the Naxalites out of the poor state Andhra Pradesh, but current reports on the ground contradict the idea that the Naxal militias have actually been driven off. What’s more, the Indian state has hardly gained the propaganda war in the state either: a recent poll in the ‘Naxal-affected areas’ of Andhra Pradesh, Orissa, Madhya Pradesh and Maharashtra indicated that among the group aged 25-50 (basically the young and middle aged workers, the basic constituent group for either side in terms of support) in the lower income categories B and C on the socio-economic scale indicated that 58% felt the Maoist movement had actually done the area good. Another one-third said the movement had the right intentions but used the wrong means to go about it, with just 15% being willing to describe them as bandits (‘goondas’).(1) For a movement repeatedly described by government and major media in India alike as “India’s biggest security threat”, this is a revealing figure. Continue reading “Rebellion mounts against ‘democratic’ India” →

A New Winter of Discontent?

by Matthijs Krul

It seems there will still be no end to the resistance movements against the depredations of capital that have sprung up in the wake of the economic crisis. Things are coming to a head in France, where hundreds of thousands have gone on strikes and demonstrations against the attempts of the Sarkozy government to raise the pension age across the board. In a brilliant move reminiscent of the powerful miners’ strikes in Britain in the 1970s, the majority of which were won by the unions, the demonstrators are now blockading petrol depots and stations in addition to gathering for protests. The French government has already been forced to admit that it only has a couple days’ worth of stockpiles to supply Charles de Gaulle airport and other major transport hubs with petrol, and it is seeking to prevent panic buying which would further diminish the flow of this lifeblood for industrialized economies.(1) If the protests do succeed at blockading the government’s access to the coal equivalent of the contemporary world, prospects of victory look good: repeated conflicts with the miners in Britain forced governments of both the Conservatives (Heath and Thatcher in ’82) and Labour (Wilson and Callaghan) to cede to the workers’ demands. Continue reading “A New Winter of Discontent?” →

A Critique of ‘Human Capital’ theory

by Matthijs Krul

One of the staples of contemporary neoclassical theory is the use of the concept of ‘human capital’, by which it broadly means all investment into skills and education as applied to individuals or an entire population. In particular in popular neoclassical growth theories, such as those developed by Robert Solow and refined by the likes of Elhanan Helpman, human capital plays a key role. It often appears as an essential component in those theories because they tend to see growth as reliant primarily on increases in productivity, which in turn are based on the interaction between the quantities of the ‘factors of production’ (capital, land and labor, though usually just capital and labor) and the state of technology. The virtue of human capital as a concept within these theories is that they allow the technological level to be determined endogenously to a greater or lesser degree, that is, that they enable the theory to take non-given and non-constant levels of technological increase into account, and model variations in technological improvement between countries. Continue reading “A Critique of ‘Human Capital’ theory” →