ECONOMIC AFFAIRS最新文献

Why do some societies go from poverty to prosperity? This question should occupy all socially conscious social scientists, particularly as we have seen successful societies experience unprecedented growth in living standards all over the world, beginning in the West roughly around 1750 (McCloskey, 2010, 2021; Mokyr, 2008, 2016). This development has been called the ‘great enrichment’ and Denmark is a prime example of this (McCloskey, 2021). GDP per capita grew from $2,031 in 1820 to $52,133 in 2022 (in 2011 dollars; Bolt & van Zanden, 2020).

Why did the great enrichment occur when and where it did? Several explanations exist. Institutionalists such as Nobel laureate Douglass North (1990) hold good institutions to be the main explanation. Other theories emphasise exploitation of people and resources, both domestic and foreign. Modern trade theorists argue that free trade can create wealth, which can lead to liberty which again leads to further innovation. In Denmark, population homogeneity has been argued to explain it too. Recently, though, a new explanation, that of ‘innovism’, has gained momentum. This concept, coined by the economic historian Deirdre McCloskey, suggests that the root cause of the wealth of nations is creativity fostered by classical liberal ideas about dignity and liberty, rather than simply accumulation of capital.

McCloskey claims that while institutional arrangements similar to what can be described as capitalistic can be observed through time, the sheer magnitude of improvement observed in the period from approximately 1750 onwards, and particularly, in north-western Europe, calls for a new explanation: innovism. She highlights the implementation of ideals fostering human action with incentives for idea dissemination and entrepreneurship as the key explainer of the great enrichment, more so than materialism or state design. As she concludes: “Innovism, that is, is a matter of creativity, which depends on liberty” (McCloskey, 2023, p. 29). In other words, the accumulation of ideas, rather than capital, becomes the key factor. This article investigates whether Denmark's impressive enrichment is indeed best explained by innovism, especially when coupled with Paul Romer-style thinking about technological ideas as infinite resources (Jones, 2019), or by competing theories such as exploitation or institutional design.

Our article is based mainly on the research behind the book Danish Capitalism in the 20th Century: A Business History of an Innovistic Mixed Economy (Sløk-Madsen, 2022). We think that this piece is a necessary add-on to help better understand Denmark's narrative of economic development, but it is necessary for another reason too. If, as we argue, Denmark's remarkable success is indeed explained by policy choices supporting innovism, with very few pre-exist

Green bonds and the broad category of environmental, social, and governance (ESG) debt are market initiatives designed to tie environmental goals to the funding mechanism of the firm. Although there is an evolving certification process for green and social bonds, it does not currently include monetary consequences for a deviation from the proposed green uses of the funding. This article provides an overview of the green/social bond market to highlight these shortcomings. After a review of the green bond literature, we note the shortcomings of the existing debt market and illustrate the benefits of sustainability-linked bonds (SLB), which reward incremental improvements in relevant performance indicators.

Why are popular perceptions of the rich important for a society? The simple answer: because the first sparks of economic growth are often kindled when a society starts to view the rich in a positive light. This has been true throughout the history of the United States, and it has also been true in China since the early 1980s when Deng Xiaoping declared: “Let some people get rich first!” (Naughton, 1993, p. 501). It is also true today in Vietnam, where the rich are viewed more positively than in almost any other country – and where GDP per capita has increased sixfold since a far-reaching programme of economic reforms was launched in 1986.

In China, the number of people living in extreme poverty has fallen from 88 per cent in 1981 to less than 1 per cent today, while at the same time the number of billionaires has increased more than in any other country; today, more billionaires live in China than anywhere except the USA (Hyatt, 2023).

In Vietnam, 80 per cent of the population were living in poverty in 1993; today that figure is less than 5 per cent (World Bank, 2022, p. 2, figure 0.1 m; Zitelmann, 2024a). Conversely, many societies started on the road to suffering and decay when they launched policies directed against the rich, as in China during the Cultural Revolution, or in Venezuela after the election of the socialist President Hugo Chávez. As the recent example of Venezuela has shown, it is not only the rich who suffer from anti-rich policies, but also the poor.

The Russian Revolution began with the struggle against the bourgeoisie, against the rich. In December 1917, Lenin demanded that extreme force be used against “this offal of humanity, these hopelessly decayed and atrophied limbs, this contagion, this plague, this ulcer”, specifically “the rich and their hangers-on”, and the bourgeois intellectuals (Lenin, 1947, pp. 259–60). His aim was “to purge the land of Russia of all vermin”, the rich and other rogues. How this should be done, he explained in drastic words: “In one place half a score of rich, a dozen rogues, half a dozen workers who shirk their work … will be put in prison. In another place they will be put to cleaning latrines … In a fourth place, one out of every ten idlers will be shot on the spot” (Lenin, 1947, p. 262).

Martin Ivanovich Latsis, one of the first leaders of the Soviet political police, instructed his subordinates on 1 November 1918:

Resentment against the rich has often even led to negative economic outcomes in democratic states, as the examples of Sweden and Great Britain in the 1970s show, where over-zealous high-tax policies and nationalisations led to massive declines in wealth (see Zitelmann, 2024b, pp. 127–48, 171–88). So there are very good reasons for learning more about how a society perceives the rich.

Hatred of the rich is an extreme manifestation and mobilisation o

The response by David Goldsmith to our recently published Economic Affairs article (Andersson & Jonung, 2024) is puzzling. Most prominently, Goldsmith stresses that the correlation between the stringency of lockdowns and excess death rates is close to zero. This is exactly the main point in our article.

If lockdowns were a clear success, there should be a significant correlation between the extent of lockdowns and excess deaths. But there is none. The least one should expect from lockdown supporters is that they would be able to show how the non-existing significant correlation we find can be turned into the significant negative relationship they claim to exist. Goldsmith has arguments but no analysis on this point.

With this insight, we hope that he shares our message that Sweden was a success story in the sense that the use of more far-reaching lockdowns in other countries than in Sweden had no apparent benefits.

Goldsmith raises the question: what constitute a successful pandemic policy? Many argue that the only way to success is to arrest the spread of the virus by the use of lockdowns, ignoring all other social, political and economic consequences. We do not share this limited view. When evaluating public policies we must consider their full impact on society. Nevertheless, even if one adopts a limited approach, draconian lockdowns were obviously not a success as they had no significant effect on excess mortality.

In our analysis we adopt a broader approach by looking at the effects of lockdowns on the macroeconomy as well. Here we find a significant negative impact of lockdowns. For example, real GDP in the United Kingdom fell by 20 per cent in the second quarter of 2020, compared with 9 per cent in Sweden. In the United Kingdom, public finances and budget deficits are now a matter of general concern as a result of the fiscal expansion during the lockdown period. In Sweden, the public debt accumulated during the pandemic has been paid off. Instead, there is a fear that the public debt may have become too low, the contrary case to the UK.

Finally, perhaps the biggest weakness in Goldsmith's argument is his failure to recognise the role of voluntary behaviour. There are two alternative ways for a government to respond to a pandemic. It can either advise the public on how to adjust its behaviour and trust citizens to act responsibly, or mistrust citizens by enforcing mandatory restrictions backed up by law-enforcement agencies. The latter approach assumes people are ignorant and incapable of making independent decisions.

If the next pandemic has a case fatality rate of 10–20 per cent, as Goldsmith speculates, people will go out of their way to avoid contact with others. This is a key point from the Swedish experience, where the authorities relied to a large extent on voluntary adjustment. It is a crucial factor in explaining why Sweden could display low excess mortality and low cos

Anton Eberhard and Wikus Kruger (Eds.), Renewable Energy Auctions: Lessons from the Global South. Oxford University Press. 2023. 512 pp. £100.00 (hbk). ISBN: 978-0192871701. £66.66 (ebk). ISBN: 978-0191967931.

Pablo Del Río and Mario Ragwitz (Eds.), Handbook on the Economics of Renewable Energy. Edward Elgar. 2023. 496 pp. £215.00 (hbk). ISBN: 978-1800379015. From £48.00 (ebk). ISBN: 978-1800379022.

Georges Hathry, Renewable Energies: The Stakes for Your Company. What does Your Company Gain from Using Renewable Energy? Our Knowledge Publishing. 2023. 76 pp. $48.00 (pbk). ISBN: 978-6206326922.

In the latest COP 28 UN Climate Change Conference held in December 2023 in United Arab Emirates, signatory countries promised a transition from carbon energy sources “in a just, orderly and equitable manner” (UNFCC, 2023) to mitigate, accordingly, the worst effects of climate change, and reach net zero carbon emissions by 2050. In the history of COP summits, though vague with respect to how and when the transition will happen, the latest UN conference set a precedent in affirming the necessity of reducing the use of fossil fuels. (Though, notably, China and India, representing more than one-third of the world's population, did not sign the pledge to triple their output of renewable energy and committed to coal power instead.)

Researchers from policy institutes, leading academic institutions and elsewhere have devoted significant effort to explaining the economic benefits transitioning to ‘renewable’ energy and pursuing the commitments made under the auspices of the UN climate change agreements. Monographs and compendiums as well offer advice on how to navigate and benefit from the transition. Some works address legal and regulatory issues such as Promoting Renewable Energy: The Mutual Supportiveness of Climate and Trade Law (Monti, 2023) or focus upon technical and engineering matters as in Fundamentals and Applications of Renewable Energy (Kanoglu et al., 2023).

Looking at each of these themes in turn, we begin with the popular concept of energy security.

Energy security is a recurring theme in the design of energy policy even though there is no consensus on how it should be measured or achieved, or on the relevant time frame over which it should be assessed. Ever since petroleum became critical to modern economic life, people have been concerned about whether its supply was ‘secure’ and would be fairly priced. Of late, such perennial concerns have been used to support renewable energy, but what ‘security’ precisely involves is uncertain.

There are many interesting metrics and indices purporting to measure energy security. It may involve the ratio of domestic supply to domestic consumption, looking at resource estimates or metrics related to economic structure such as producer concentration, energy intensiveness and market con

The Bengal famine of 1943 has received significant attention from academia, politicians and the public. This is the result both of its considerable death toll and the range of factors held responsible, including politicians. However, despite the quantity of discussion and controversy that it has generated, three areas have thus far been insufficiently addressed: the results of the Bengal Food Drive, the geographic link between famine and the ‘denial policy’, and the economic Balkanisation of India. This article addresses these areas to draw a more rounded conclusion on the debate around the famine.

This article examines the political economy of fiscal dominance during the Chilean government (1970–73) of Salvador Allende. Fiscal dominance appears when the monetary authority complies with the fiscal authority's demand to buy treasury bonds and monetise the deficit. It is argued that persistent fiscal dominance is inflationary, especially without robust fiscal and monetary rules. The Allende government financed the deficit with present taxes, debt (future taxes) and monetary issuance (inflation tax), causing the crowding-out effect and, together with other policies such as expropriation and price controls, collapsed the demand for money, triggering hyperinflation. The lessons of Chile clarify the fiscal trigger of the inflation, stagnation, and widespread poverty that has affected Latin American countries in recent decades.

The literature reports mixed findings on the role of government intervention, even during times of crisis. The recent Covid-19 pandemic damaged the financial health of many small firms. This study examines whether government subsidies are associated with bankruptcy rates for firms with deteriorating financial health. Using a sample of 18,422 firms from 44 countries, we estimate a logistic model that accounts for rare events. Results indicate that those firms which receive government support are more likely to be associated with insolvency, even in the absence of liquidity issues and overdue financial obligations. Policy implications are discussed.