Day 32 was on November 29 and it started with a quiz; here is what I had to say about that:

“quiz day, I don’t think we are ally marked on these, so pass or fail doesn’t really matter. They do help when studying for the midterm and the upcoming final. I do well on the exams but not these quizzes, I don’t know what that says about me as a person… these quizzes are 3 minutes long but he (the professor) goes over the answers after and this review takes up a good chunk of lecture time… I don’t really mind.”

Lecture days that have a quiz tend to be shorter due to the quiz taking up time. Anyway, the lecture began with the key aspects of globalization, there are three: Foreign direct investment (FDI), Trade, and International capital flows (ICF); FDI in directly productive activity, capital from elsewhere is needed for this; Trade exports and imports goods and services; ICF hugely increased transnational movement of money (more than $1 trillion crossing international borders daily). Greater globalization loosely associated with poverty reduction. Neoliberal approaches argue that the free flow of capital would boost the economy and reduce poverty, this correlation is very questionable. I then said as a personal note: not for nothing, but would that not matter unless they used that capital to invest in poverty reduction directly? Free flow of capital doesn’t really do much for poverty unless its directly targeted. At least thats how I’ve understood it. Rich capitalist countries have major poverty problems so doesn’t that just disprove the neoliberal approach?

Before we move on it was stated that during the 50s and 60s there was a decolonization boom. Now we can get to the rest of the lecture: The ISI era. ISI stands for import-substitution industrialization which encourages domestic and international investment through protecting new industries and limiting imports by placing restrictions and tariffs on trade. It accepted modernization theory with a Keynesian approach, it was relatively successful in the initial stage. Inefficient industries and oil shocks led to international loans which then resulted in a global debt crisis. The ISI was then followed by the SAP era, structural adjustment programs: which sounds great but actually it was not. The idea behind SAPs was to end the protection of industries and other restrictions on free trade, privatization, reduction of fiscal deficits, and etc. It’s just the opposite of ISIs. The IMF and WB changed and shifted its economic policies from Keynesian to neoliberal, these policies were imposed on the Global South. If the Global South ever wanted to borrow money they had to accept the SAP program or the were shit out of luck; there was no other way to borrow money except via the IMF and WB (is that not neocolonialism?). SAPs were politically unpopular due to them accelerating economic pains and the fact that they were generally disastrous and chaotic. If you could endure the pains then you would be rewarded (this low-key reminded me of seed faith or some other religious thing).

The effects of SAPs were mixed: GDP grew more slowly than wealthy countries and the World’s extreme poverty decline was concentrated in East and South Asia. There are three theories as to why SAPs failed so horribly: a failure of implementation, which is related to rational choice theory which would take the issue was due to self serving politicians; institutionalists argue that that SAPs are only applicable in certain circumstances and are only workable when embedded in strong institutions: weak states cannot secure investments and future profits, “flying geese” (Japan as head goose followed by South Korean, then Hong Kong, and then China, I guess), and a fallacy of composition that SAPs could be successful for early-risers but not for late-comers; the last theory is that SAPs failed due to fundamental flaws in the model itself: neoliberal SAPs undermine the real fundamentals of long-term development such as infrastructure and human capital (no shit). SAPs fiscal austerity was a disaster for pró isn of political goods. A study of Latin America shows that provision of enhanced social policies does not decrease economic growth and reduction of poverty more than growth alone did.

A broader review of the effect of neoliberal SAPs:

Beneficial initial conditions: good geography, large endowments of low-skilled labour and strong institutions

World Bank’s agenda of “good governance” - provision of the key requisites: political goods

Alternatives: developmental states in E.A. (I don’t know if this is about Africa or Asia) and a leftist alternative in Latin America.

The developmental state focused on export-oriented growth (EOG): growth via exports of goods and services. Unlike the ISI, EOGs were not aiming to provide manufactured goods for the domestic market but exports to wealthier countries. The recipes for this are neoliberal fiscal and monetary policies; high quality education systems; and a strong state. EOGs are the most successful developmental model but is difficult to imitate due to the middle-income poverty trap. New developmentalism proposes a balanced budget against inflation and trade liberalization for exports, avoidance of overvalued currency, and raising wages to stimulate demand. I remember this being stated in one of my classes, I don’t remember if it was in history or Political Science and I don’t remember if it was this lecture or another one, but what I do remember is that a professor said that China keeps its currency low to stay economically strong with regards to trade (or something. Like that).

The lecture ended on the “Pink Tide”in Latin America but it was kin of glossed over because we were running out of time. Here are the main points: the Pink Tide was a leftist trend in Latin America and was a response against neoliberalism. Governments during this tide varied widely, Argentina and Brazil preserved macroeconomic foundations of neoliberalism but implemented greater social programs. Hugo Chávez in Venezuela challenged the market model (there was a disclaimer made that Chávez’s model fucked over Venezuela and now Maduro is a little better but not great) and Lula’s social development with growth and new social programs in Brazil. Growth peaked in 2010.

Fun fact: nearing the last half of the lecture I became very distracted, and even made note of it, because the girls that sit directly behind me (its a small class, not a hall/auditorium) were very chatty this day. They typically chat here and there but this day it was extra. Oh well, annoying as it is what am I gonna do about it? Hopefully my future classes I wont have to deal with it, and if I do then the professor or someone else will say something because I sure as shit will not.