Univ. of Cassino and Southern Lazio Lectures
World Capitalism in Crisis
Guest
Prof. Toshiaki Hirai
Preface
Part I Global Capitalism and the Economies
Lecture 1
How Should We Grasp Capitalism and Globalization?
Lecture
2 Financial Liberalization and
Instability
Lecture
3 Whither Capitalism (the Market Society)?
Lecture
4 The Euro Crisis
Lecture
5 Self-Trapped Japanese Economy
Lecture 6
Quantitative Easing Policy in the US and Japan
Lecture
7 What Is Happening to Economics?
Part II. What Keynes
Achieved for the Modern World
Lecture
8 The Life of Keynes
Lecture
9 Keynes’s Economics in the Making
Lecture
10 Social
Philosophy in Interwar Cambridge
Lecture 11 Employment Policy in the Making
Lecture 12 Welfare State in the Making
Lecture 13 Commodity Control Scheme
Lecture 14 Relief and Reconstruction Problem
Lecture 15 International
Monetary System
From
April through June in 2016 I had the opportunity to deliver a series of
lectures at the University of Cassino and Southern Lazio, Italy, and I prepared
the files for them. Now, one year later, it has occurred to me that I might
arrange and edit them in such a way as to produce a readable book. Let me
present this plan.
Through an exchange of emails with the
professors in charge of the program there, I planned to deliver the lectures
based on two themes: Part I “Global Capitalism and the Economies” and Part II
“What Keynes Achieved for the Modern
World”. At first sight the two appear to be presented separately, but they are,
in fact, interconnected.
This book is structured with Part I and Part II bearing the same titles
as the files for the lectures. Part I consists of seven lectures, Part II of
eight. Let me briefly outline Part I and Part II, referring to the lectures
concerned.
Part I Global
Capitalism and the Economies
Even
confining attention to the last three decades, the world economy has gone
through considerable transformation. In the latter half of the 1980s we saw the
rapidly accelerating political disintegration of the Socialist Bloc, which at
last brought about the collapse of the Soviet Union, and with it the Cold War
which had dominated the post-war world came to an end.
The Capitalist Camp,
meanwhile, had already made great changes, in the 1970s, in the international
monetary system and trade structure, deterioration of the US economy
contrasting with the remarkable economic growth of the economies of Japan and
West Germany. With the advent of the 1980s, this trend became more striking –
especially the economic growth of Japan – in contrast with the US, which
suffered from stagflation as well as the “twin deficits”. In the latter half of
the 1980s, Japanese firms made great efforts to address the depression
resulting from rapid yen appreciation subsequent to the Plaza Accord (1885),
and the technological innovation they achieved caught attention and stirred
wonder throughout the world.
The former Soviet bloc, which abandoned the
socialistic system, tried to reconstruct their economies by adopting the
capitalistic system in haste (that is, applying “Shock Therapy”), which brought
about tremendous economic collapse together with severe political and social
decline.
Such was not the case
with China, however. China, which had launched reconstruction of the economy
under the leadership of Deng Xiaoping through the gradual Capitalistic reform
in 1978 (“Reform and Opening-Up” Policy), succeeded in attaining vigorous
economic growth (over 10 percent annual rate of growth consecutively since the
1990s), as a result of which it has emerged as a great economic nation, ranking
second in terms of GDP, and on the strength of this exerting great influence
over the world economy.
Besides China, the new
“emerging nations” called the BRICs achieved rapid economic development,
raising their heads purposefully in the world economy. Among other countries,
Russia, with Putin as the President, has shown great presence in not only
economic but also political terms.
Over just these three
decades, the world economy has thus seen transformation on a vast scale. As
from the 1990s we have witnessed increasing uncertainty and fragility due to
excessive financial globalization, eventually bringing about the catastrophic meltdown
in the fall of 2008 ― the “Lehman Shock”.
In Part I, “Global Capitalism and the
Economies”, how global capitalism has evolved during these three decades and
where it will be going from now on are examined from several points of view.
Firstly, examination
focuses on what capitalism and globalization are (Lecture 1) and the financial
liberalization (or financial globalization) and instability which it brought on
the world economy (Lecture 2). Secondly, we come to what kinds of problems the
economies of the developed nations such as the US, the EU and Japan faced and
how the governments addressed them, and what the results of these efforts were
(Lecture 3 through Lecture 6). Thirdly, critical examination is made of the
role economics has played in these events (Lecture 7).
Part
II. What
Keynes Achieved for the Modern World
John
Maynard Keynes was probably the most important ― unquestionably the most influential ― economic thinker to emerge in the first half of the 20th
century . After his death, his influence in the spheres of macroeconomics and
economic policy-making became, over the course of the third quarter of the
twentieth century, so overwhelmingly dominant that the period might with some
credit be designated as the “Age of Keynes”.
The evolution of Keynes’s thought was induced
as much by the events of the real world, in which he was himself deeply
engaged, as by those of the world of economics. He developed his own monetary
approach to economics, centering on the theory of effective demand, and, on
that foundation, advocated economic policies to address the pressing problem of
mass unemployment which marked the inter-war years. It should be added that the
stance Keynes took in economics and in practical affairs was closely linked to
his social philosophy ― the “New
Liberalism” ― which insisted on the
necessity for judicious intervention on the part of governments to
facilitate the orderly functioning of the economy ― an outlook set squarely against the 19th -century laissez―faire.
Apart
from his activities as an economist, Keynes was much involved in international
negotiations throughout his life, starting with the financial negotiations with
the US during WW1 and at the Paris Peace Conference. Among other things, he not
only put forward important proposals for the design of the post-war world order
but also led the UK through the negotiations with the US as the top figure in
the United Kingdom delegations.
In Part
II, “What Keynes Achieved for the Modern World”, firstly Keynes is introduced
with a brief biography (Lecture 8). Secondly, we see how Keynes arrived at his
magnus opus, The General Theory of
Employment, Interest and Money (1936) moving on from his former book, A Treatise on Money (1930) (Lecture 9).
Thirdly, we see what kind of social philosophy on capitalism the Cambridge
economists expressed – six economists, including Keynes (Lecture 10). Fourthly,
we look into his activities as policy advisor or system designer, including the
field of domestic policy such as employment policy and welfare state planning
(Lectures 11 and 12) and the issues of the international system including the
commodity problem, relief and reconstruction, and the international monetary
System (Lectures 13-15).
