February 01, 2016

Greek Debt Crisis: The Origins and The Way Forward

The Origins of the Crisis and Current Approach of the Troika
  Greek Debt Crisis is a mislabeled phenomenon. The causes of the turmoil does not originate solely from Greece’s own economic mismanagement and structural problems but in fact from the inherent contradictions of European banking system. Credit boom which was mainly driven by European Banks during the first decade of Euro made everyone to borrow and lend with “super-low” interest rates without taking into account the differences and vulnerabilities of European economies (Blyth 2015a). Hence, the responsibility lies on reckless international lenders as much as it lies on irresponsible Greek borrowers.

Leia Mais…

January 25, 2016

Why Are Poor Nations Poor?

Poverty Basics: From Historical Materialists to State Interventionists
From late nineteenth to twentieth century, two theories attracted most of the attention to explain the causes of poverty within the framework of Marxism-Leninism. The Asiatic Mode of Production was one of them. This approach suggested that poverty (in Asiatic societies) was mainly caused by a “despotic ruling clique” which directly expropriated surplus from village communities (p.94 Lewis 1997). The second one, the Dependency Theory which explained the foundations of poverty via the Latin American experience, claimed that capitalist states entrenched the poverty by ensuring resource flow from the "periphery" of underdeveloped states to the "core" of wealthy states. Theory further asserted that such an outcome actually originated from the deterioration of terms of trade for the benefit of developed countries which in turn enriched them at the expense of underdeveloped ones (Prebisch, 1950; Singer, 1950).

Leia Mais…

January 18, 2016

Does State Intervention to Markets Cause Inefficiency and Low Growth?

Let’s bluntly clarify our stance on this issue in the beginning. State intervention to control globalization neither causes inefficiency nor impedes growth, instead it actually eases the ill-effects of unregulated markets. The thesis in this piece is based on three arguments that (i) the protectionist measures adopted and widely used by today’s advanced nations were in fact the main impetus of their development in the eighteenth century and (ii) in the absence of state intervention, free markets only causes widespread financial crises as well as (iii) exacerbates poverty and inequality in the world.

Leia Mais…