5 Key 2021 Books in Political Economy

Gábor Scheiring, head of Political Economy section at the Review of Democracy, selects five of the most intriguing books in this area

Isabella M. Weber: How China Escaped Shock Therapy: The Market Reform Debate

How China Escaped Shock Therapy challenges the neoliberal globalist narrative concerning China. The conventional wisdom holds that China’s miraculous economic growth following the second half of the 1970s is a direct consequence of economic liberalization and the country’s integration into the global capitalist economy. The heterodox-institutionalist critique of the globalist narrative that Weber follows does not suggest that global integration is detrimental to socioeconomic development. The argument is rather that the juxtaposition of successful neoliberal globalism and inward-looking statism is utterly misleading. 

Isabella Weber’s meticulously researched monograph tells the story of China’s break with the international economic policy mainstream. Instead of succumbing to the intellectual fashion of the day, China’s economic policymakers steered away from shock therapy. China followed other East Asian developmental states that integrated into the global economy while maintaining the state’s central role. In Weber’s narrative, ideas are central. Isabella Weber’s extraordinarily detailed analysis of the economic policy debates around price reforms offers several lessons for today. Shock therapy has changed, but market fundamentalism is still on the agenda. The combination of historical depth with theoretical insights that also speak to contemporary debates makes How China Escaped Shock Therapy a benchmark monograph in the literature on the political economy of China and shock therapy.

Kristen Ghodsee and Mitchell Orenstein: Taking Stock of Shock

Architects of socialism built the Berlin Wall, symbolizing political unfreedom. When it fell, new walls emerged. Architects of neoliberal capitalism have built walls made of precarity and inequality, limiting what Eastern Europeans could do with their newly gained freedom. Scholarly walls separating disciplines inhibit us from correctly gauging the postsocialist landscape. 

On the one hand, economists, liberal elites, and international financial institutions still consider the postsocialist transformation a historical success, although they acknowledge the unforeseen pains. On the other hand, a growing camp of social scientists and a fledgling new left scene are critical of postsocialist liberalism’s performance. In politics, right-wing populists around Eastern Europe capitalize on people’s disillusionment. 

Ghodsee and Orenstein find evidence for both the success and the disaster narrative. However, the most direct contribution of the book lies in its careful documentation of the empirical evidence for “suffering of epic proportions.” As an explanatory framework, the book’s inequality narrative does not sit midway between two opposing academic camps. Instead, it reads like the disaster narrative recast to integrate the evident successes better. 

Taking Stock of Shock results from a massive interdisciplinary endeavor, and it is a timely and crucial contribution to the debate on postsocialism. Knocking down disciplinary walls, Ghodsee and Orenstein provide a uniquely broad insight into the postsocialist landscape. Taking Stock of Shock presents the most comprehensive assessment of the postsocialist transformation yet. 

You can listen to our podcast with Mitchell Orenstein here.

Adam Tooze: Shutdown: How Covid Shook the World’s Economy

Adam Tooze’s latest book is a short history of how Covid-19 ravaged the global economy and what lessons it offers. In a matter of weeks, the world economy was brought to an abrupt halt by governments trying to contain a spiraling public health catastrophe. Since the second world war, the entire global economic system has contracted for the first time. Central banks responded with unprecedented interventions to keep their economies on life-support. Tooze’s book tells the story of that shutdown. In this fast-paced, compelling, and at times shocking analysis, Adam Tooze surveys the wreckage and looks at where we might be headed next. 

Tooze was on academic leave when the pandemic broke, cooperating among others with the Heinrich Boell Foundation, the political think affiliated with the German Greens on transformative policies. His interest in how policymakers can respond to the global environmental crisis looms large in the background of his assessment of the Covid-19 pandemic. What makes Adam Tooze’s book really stand out is that it argues that the Covid pandemic is the first crisis of the Anthropocene, an era marked by humanity’s impact on the planet. Shutdown analyzes the present crisis to prepare us for the next. Humanity needs to get a handle on the world system created out of short-term agendas and steer it along long-term objectives. 

Amory Gethin, Clara Martínez-Toledano and Thomas Piketty: Political Cleavages and Social Inequalities: A Study of Fifty Democracies, 1948–2020

This edited volume draws on a unique set of surveys conducted between 1948 and 2020 in fifty countries on five continents, analyzing the links between voters’ political preferences and socioeconomic characteristics, such as income, education, wealth, occupation, religion, ethnicity, age, and gender. This analysis sheds new light on how political movements succeed in coalescing multiple interests and identities in contemporary democracies. It also helps us understand the conditions under which conflicts over inequality become politically salient, as well as the similarities and constraints of voters supporting ethnonationalist politicians like Narendra Modi, Jair Bolsonaro, Marine Le Pen, and Donald Trump.

The very breadth of this volume makes it stand out from the crowd of books on the political economy of cleavages. Harmonizing election surveys from fifty countries, the database assembled by Piketty and his collaborators itself represents a major contribution. Editors Amory Gethin, Clara Martinez-Toledano, and Thomas Piketty offer an empirically nuanced and robust, theoretically compelling framework for understanding how inequalities shape political behavior and affect the future of democratic politics.

Mariana Mazzucato: Mission Economy: A Moonshot Guide to Changing Capitalism

Even before the Covid-19 pandemic in 2020, capitalism was stuck. It had no answers to a host of problems, including disease, inequality, the digital divide and, perhaps most blatantly, the environmental crisis. Taking her inspiration from the ‘moonshot’ programs, which successfully coordinated public and private sectors on a massive scale, Mariana Mazzucato calls for the same level of boldness and experimentation to be applied to the biggest problems of our time. We must, she argues, rethink the capacities and role of government within the economy and society, and above all, recover a sense of public purpose. Mission Economy, whose ideas are already being adopted around the world, offers a way out of our impasse to a more optimistic future.

While Adam Tooze’s Shutdown document’s Covid-19’s economic impact and the unprecedented governmental responses, Mazzucato’s book uses the evidence for the immense power of governments to delineate an approach to transforming capitalism to save humanity’s future. The author does not argue for the abolition of markets. However, she challenges those narratives that portray the state as inefficient and incapable. Analyzing NASA’s complex endeavor to make landing on the moon possible, Mazzucato shows how state-led cooperation between entrepreneurs, civil society, and governments can solve the biggest challenges humanity faces today.

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