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Forthcoming Events

IoI Forum
Emerging Economies Forum
Venue: London
Date: Ongoing

The IoI Emerging Economies Forum meets regularly to discuss issues raised by the growth of emerging economies and their economic, political and cultural impact on the world.


If you would like to join the forum, or would like further information, please contact Angus Kennedy at EmergingEconomies@instituteofideas.com.

Upcoming forums

The military-industrial complex today: Thursday 14 June 2012

The next meeting of the Economy Forum will be at 7pm Thursday 14 June 2012. Please email if you would like to attend.

Professor James Woudhuysen will introduce the discussion.

In terms of industrial policy, it can be argued that the UK – and even more, the US – have long had one: it's called the state's procurement of weapons that have a fair amount of R&D put into them. Most recently, Obama's State of the Union address (January 2012) said that the US Department of Defense, the world’s largest consumer of energy, would make one of the largest commitments to clean energy in history – with the US Navy purchasing enough capacity to power 250,000 homes a year.

Clearly the role of military procurement has changed over the years; right now, for instance, the new US cybersecurity agency cannot find all the computer specialists it wants. Since Eisenhower's influential and liberal 1961 farewell address, which coined the phrase 'military-industrial complex', US defence spending totals and percentages, as well as US forces/weapons postures, have likewise been through their ups and downs, declining as a percentage of GDP during the Cold War and reviving even before 9-11, and certainly since. Over the years, too, nuclear weapons, always a relatively cheap option, have become a smaller and smaller element in US defence spending.

Economic and political attitudes to the MIC have also changed. Historically the left always attacked the MIC for its pork-barrel subversion of democracy, its expense, its waste, its baroque product innovations, its arms exports, its debatable 'spin-off', and its direct interest in starting wars. On the other hand, from Baran and Sweezy in the 1950s through to the British SWP, military budgets have long been seen as an essential Keynesian support for capitalism, mopping up the capitalist 'surplus' generated elsewhere. More recently, however, the US has seen (and again the UK is not far behind) a convergence between militarists worried about energy security, and Greens keen on military innovations spinning off into renewable energy.

Cuts in UK defence are sharp. At the same time UK defence secretary Philip Hammond has just added his voice to traditional US demands that Germany do more in defence. Meanwhile cuts in US defence are a mirage, and there is a very rapid increase in defence spending in China and India.

What role would we assign to expenditure on armed services and weapons today? Are arms really so different from other kinds of products? Why have attempts to restructure the MIC, and reap a peace dividend, proved so difficult? What do we make of the growing US deployment of private armed services in places like Iraq? What can we foresee about the future course of defence spending, in the UK, the US and Asia?

Suggested readings

For MIC buffs:

For MIC super buffs:


Past forums

When all the fruit is gone: Tuesday 17 April 2012

Phil Mullan introduced a discussion on the recent book The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better

Cowen attributes America's economic troubles to a combination of technological exhaustion by around the 1960s, and of Americans' failure to see that this technological plateau had been reached and to adjust accordingly since.

Questions to consider:

Suggested readings

Not essential for the discussion but if you are interested in the technology-productivity theme historically:

Equality and Efficiency: the big trade-off, Tuesday 28 February 2012

Angus Kennedyintroduced a discussion on the classic text Equality and Efficiency: the big tradeoff by Arthur M. Okun. As many call today for increased taxes to pay for social entitlements and to restrain the alleged greedy excesses of bankers and the City, for the state to deliver social justice and fairness, it is worth considering the arguments that attempts to increase equality in society can not only be economically wasteful and inefficient but also even that they come at the expense of freedom and at the risk of creating a culture of dependency and passivity.

“High tax rates,” wrote Okun, “are followed by attempts of ingenious men to beat them as surely as snow is followed by little boys on sleds.” Is it true that there is a necessary tradeoff between equality and efficiency? That attempts to regulate the economy such as Basel III are doomed to failure? Would lower tax rates benefit us all or just the well-off? In what sense can we be considered to be equal, if any, so long as inequalities in wealth distribution remain?

Suggested readings

Less cash? More inequality? The reality of changes in UK living standards, Wednesday 21 September 2011

Daniel Ben-Ami introduced a discussion on trends in living standards in Britain. There is much talk about growing poverty, rising inequality and the impact of public spending cuts on the British population. This discussion will seek to identify real material changes in living standards. It will attempt to work out developments in relation to poverty, inequality and austerity in recent years. It will also consider the pitfalls of different approaches to measuring such shifts. In the aftermath of the English riots and against a background of ongoing austerity, it is important to establish to what degree Britons are really feeling the pinch.

Questions to consider

Suggested readings

Is the dollar dead?, Wednesday 3 August 2011

Phil Mullan introduced a discussion on the fate of the dollar. During most of the twentieth century the US and the dollar have reigned supreme in the world. The dominance of the dollar as the leading international currency has both expressed US hegemony and also more recently helped to sustain it. As each year passes economic power is shifting more and more away from the US, and from the west in general, to China and the rest of the emerging economies. How much longer can the US expect to maintain its own currency as world money?

Questions to consider

Suggested readings

Inflation: is the problem getting bigger?, Wednesday 1 June 2011

Professor James Woudhuysen introduced a discussion on inflation, commodity price ups and downs, and what may lie ahead.

Questions to consider

Suggested readings

Behavioural Economics, Thursday 5 May 2011

Timandra Harkness introducd a discussion on behavioural economics.

Questions to consider

Suggested readings

Articles

Global Imbalances, Thursday 24 March 2011

Ben Hunt, author of The Timid Corporation: Why Business is Terrified of Taking Risk, introduced a discussion on global imbalances.

Questions to consider

Suggested readings

For reference

The New Economics, Thursday 10 February 2011

Daniel Ben-Ami introduced the discussion.

Background

The 2008-9 economic and financial crisis was a tremendous shock to the discipline of economics. Economists were mortified by their failure to predict events. Within a short time it became widely accepted that many core elements of the discipline were sadly lacking.

Common themes in the discussion of economics included the need to make it more moral, historical and understanding of human psychology. This meant it should be correspondingly less focused on profits, mathematical models and the idea of rationality.

Typically the case for the new economics, also sometimes referred to as the “Keynesian resurgence”, was put in counter-position to a supposed free market orthodoxy. Supporters of new economics saw themselves as pragmatic proponents of state intervention rather than doctrinaire advocates of the free market.

Perhaps the best known institution promoting new economics was the Institute for New Economic Thinking. Since its foundation in October 2009 the organisation has gained the support of many of the world’s top economists and economic policymakers.

Existing think tanks which took up the theme included Demos and the IPPR. This was in addition to organisations that pre-existed the crisis such as the New Economics Foundation and the New Economics Institute - although the latter changed its name from the EF Schumacher Society in 2009.

Questions to consider

Suggested readings:

Where in the world is the economy going? Wednesday 15 December 2010

The discussion – an end of the year review – was on the state of the world economy post G20, with introductions by Rob Killick and Mina Blauel on the situation in the developing and in the developed world: global imbalances between slow growth and rapid development; currency wars; trade deals; protectionism; etc.

Read Rob Killick's edited introduction.

Suggested readings:

Sunday 10 October 2010

The next meeting of the Economy Forum will be at 2pm Sunday 10 October. Please email if you would like to attend.

Alex Hochuli will introduce a discussion on Anatole Kaletsky’s latest book Capitalism 4.0

Suggested readings:

Sunday 5 September 2010

Professor James Woudhuysen introduced a discussion on 'Does Britain need an industrial policy?'

Some questions to consider:

And some suggested readings:

Sunday 25 July 2010

Daniel Ben-Ami introduced a discussion on his new book Ferraris for All: In Defence of Economic Progress

Some questions to consider:

Sunday 20 June 2010

Yimeng Liu introduced a discussion on the realities of income distribution in China in the context of its rapid economic growth.

Yimeng kindly submitted this paper, Income Disparity in China, as a briefing document.

Further suggested readings:

Sunday 30 May 2010

Patrick Hayes introduced a discussion around the ongoing economic crisis in Greece and what it means for Greece, Europe and the world economy.

Greece owes about €300bn (115% of GDP). Public spending currently stands at 51.3% of GDP and only last October the government had committed to increasing already generous welfare benefits, including raising unemployment benefits from 63% to 70% of the minimum wage. Greece now faces the imposition of severe austerity measures, causing considerable domestic unrest by its heavily unionised workforce, making markets nervous that it’s only a matter of time before Greece fails to meet its debt repayments.

Would Greece emerge faster from the crisis by defaulting on its loans and leaving the Eurozone? Given the current state of Greek industry, is there a realistic alternative to stringent austerity measures? What are the main obstacles in the way of avoiding a new financial crisis and a return to productive economic growth in Greece and across Europe more broadly?

Selected suggested readings:

Sunday 25 April 2010

Angus Kennedy introduced a discussion on America the rich?: looking at the the material realities of poverty in America today, the immiseration of the masses and asking whatever happened to trickle-down theory.

Some questions to think about with the readings:

  1. Is America really becoming two nations? One poor, one rich? Are the rich stealing from the poor to finance their lifestyles?
  2. If productivity has been growing in America in the last decade, are the benefits trickling down across society as a whole? If not, why not?
  3. If they are, what explains supposed rises in poverty and long-term unemployment?
  4. Are demographic shifts a key factor to consider in explaining changes in income distribution?
  5. What about gender? Have women benefited at the expense of men?
  6. If economic growth is to the benefit of all, how come many are working longer hours, taking two jobs and so much in debt?

Selected suggested readings:

Further background material:

Sunday 21 February 2010

Daniel Ben-Ami introduced a discussion on The Redefinition of Poverty: looking at the shift away from quantitative to qualitative measures such as wellbeing and happiness.

Suggested readings:

Questions to consider:

  1. How does Sen understand poverty?
  2. How does he use the concepts freedom and equality? How does his usage differ from that of others?
  3. What is meant by a capability approach?
  4. What is the significance of the quote from Aristotle on p253?
  5. How does Sen's approach to happiness differ from Layard's?
  6. What are the practical consequences of Sen's overall approach?
  7. Is it fair to call him a growth sceptic?
  8. Is this discussion appropriate for an economics workgroup?

Sunday 6 December 2009

Angus Kennedy chaired a discussion reflecting on differing perspectives on the future of capitalism as revealed by a recent debate between Martin Wolf and Alex Callinicos.


Sunday 27 September 2009

Rob Lyons, deputy-editor of spiked, introduced a discussion on the state and the recession.


Sunday 23 August 2009

Michael Savage introduced on the New Philanthropy: Philanthropy has become a talking point. Vast fortunes have been made recently, and philanthropists like Bill Gates are giving on a huge scale. What is the new philanthropy and what could we say about it? The new philanthropy is amorphous. Debates about it are often vague and there is no agreed definition. But we can make sense of some overlapping ideas. Celebrity philanthropists are raising awareness, billionaires are demanding more bang for their philanthropic buck and social entrepreneurs like George Soros are engaged in political interventions.

There are several distinct features of the new philanthropy. Old-fashioned philanthropists often left fortunes in their wills, and gave money for others to spend. Today many philanthropists are giving earlier and maintaining involvement in how their money is spent. There was some discussion of the extent to which philanthropists are uncomfortable with being capitalists. Whilst there is celebration of capitalist giving, it was noted that entrepreneurship rather than capitalism is being celebrated.

We discussed political points to draw from the philanthropy discussion. Whilst it intersects with many issues, it is difficult to discuss directly because it is so amorphous. However, the undemocratic character of rejecting popular/political action in favour of rich people doing the right thing was noted.

Meanwhile, Stuart Simpson introduced on Financial Engineering, focusing on three key areas.

Risk: The trading of risk in financial markets must first be understood as a method of allocating capital. The term ‘risk’ has a specific meaning in the context of financial markets that is not directly transferable a wider social discussion of risk. Many functions performed by trading risk through the use of derivative products free up capital for other uses. The purchase of a commodity futures contract may reduce the requirement for a firm to hold large stocks of a commodity to protect against the volatility of commodities markets. Many of the largest derivative markets exist due to the withdrawal by the state from managing these risks directly, such as the ForEx markets. However, many states still significantly control the value of the domestic currency. The Chinese state, through controlling the value of RMB, removes the requirement for individual firms to manage their own foreign exchange risk through the financial markets or otherwise.

Financialisation: The use of financial products by non-financial firms is not sufficient evidence of a move towards increased financialisation. The purchase of financial products on the part of non-financial firms is often evidence of hedging activity, whereby non-financial firms limit their exposure to volatile financial markets in order to focus on the core business of the firm. Legal precedent makes it extremely unlikely that treasury departments of non-financial companies or public bodies such as councils are able to engage in speculative activity. Contracts that do not conform to strict definitions of a hedge – involving an underlying position that results in the net position that cancels out speculation – may be declared ultra vires, resulting in a lose-lose situation for any counterparty to the transaction. A specific point was raised regarding the profits made by car firms through financing the purchase of their own products. This type of activity is best understood as a pricing/sales policy on the part of car firms. Any profits made through financing are ultimately derived from the production of the product financed. It is not clear to what extent non-financial firms are involved in markets for more recent credit products.

Credit derivative products: Recent developments in credit derivative products are a significant departure from more traditional derivatives markets, although some important common features are shared. ‘Default is not a probabilistic event, a coin toss, it is a business decision.’ (Paul Wilmott). The use of mathematical models to construct default probabilities was identified as significantly different from the construction of more traditional models, such as Black-Scholes option pricing. The existence of an asset price bubble was regarded as a more significant feature leading to the acceptance of such models, than complex mathematics. The models allowed banks to make a profit. Credit derivative products can be understood as a method of increasing leverage and taking on more risk during an asset bubble. Credit derivative products allowed banks to lend increasing amounts supported by relatively decreasing capital reserve – they were a method of gaming capital adequacy regulations. In addition, US banks were able to use credit derivative products to circumvent the spirit of the depression era Glass-Steagal act, which was subsequently repealed after the fact. Hyman Minsky was recommended as a useful starting point in understanding the development of a asset bubble in the context of a complex financial system.


Sunday 2 August 2009

Angus Kennedy, IT Consultant and web master Battle of Ideas and Culture Wars websites, introduced on 'UK – the productive economy': It has become commonplace to put the blame for the current recession on the shoulders of greedy bankers, on the increased financialisation of the British economy over the last twenty years. In some ways, however, this is unfair since there has been a much longer term decline in British manufacturing industry. Leaving a hole, it could be argued, which the growth in financial services and public spending has been attempting to plug. Although some commentators now call for a return to productive investment and a regeneration of manufacturing to set the balance right, is this at all realistic? Is there something intrinsically wrong with an economy based on services and high levels of consumption? Is an economy based on ‘production’ somehow better and sounder? What should the balance be?


In assocation with the EEF

Bookshop Barnie: Nandan Nilekani on 'Imagining India: Ideas for the New Century'

Thursday 23 April, 8pm @ Stanfords Bookshop, 12-14 Long Acre, London WC2E 9LH

In this Bookshop Barnie, Austin Williams presented Nandan Nilekani, head of Infosys, India’s largest IT services company, discussing his new book Imagining India: Ideas for the New Century. The discussion focused on the ‘demographic dividend’ and other fascinating global issues with the author - named Forbes’ Business Leader of the Year and one of the 100 Most Influential People in the World by Time magazine.

www.futurecities.org.uk/barnies


Thursday 16 October

Norman Lewis, chief strategy officer, Wireless Grids Corporation; author, Digital Kids introduced A Brave New World: Are the emerging economies the new technological innovators?

QQ, Tudou, Mixi and CyWorld are not familiar names in the West, but these websites based in China, Japan and South Korea are more popular, profitable and technically innovative than their Western counterparts, MySpace, Facebook and YouTube. South Korea and Japan are the most advanced internet markets in the world, with China and India rapidly catching up. Yet we in the West seem oblivious to the development of such technologies in Asia. What, if anything, can the West learn from technical innovation coming out of the emerging economies?

Norman Lewis will be speaking at a session on this topic at the Battle of Ideas 2008. Click here for more.


Sunday 14 September

Patrick Hayes, Henley Business School MBA candidate and Promotions Manager of the Battle of Ideas, introduced Can India compete with China as an economic superpower?

China’s growth and potential as a future superpower is currently dominating the headlines. However, with sustained annual economic growth of 8-9% and a growing population that has been estimated to overtake China’s by 2050, India is in many ways developing as spectacularly. In preparation for the session “China and India: Catching up with the West?”, part of the Battle for Prosperity strand at this year’s Battle of Ideas festival, this forum will examine the extent to which India can remain on its current growth path to become one of the leading economic superpowers of the 21st Century.


Sunday 3 August 2008

John Pender, who has published articles on World Bank development policy, introduced the Commission on Growth and Development Report

In August 2008 the Commission on Growth and Development will release its final report. The Commission headed by the Nobel Laureate Michael Spence attempts to draw lessons for development from looking at the experience of the 13 most successful developing economies in the post war period. Some have said that the report finally puts the Washington Consensus to bed, that the state is back on the agenda, and that one size fits all solutions are out. What insights does the report offer, and what are its limitations?


Wednesday 28 May 2008

Sheila Lewis, director of Volanti Consulting and co-producer of the Battle for China, introduced 'Is China the economic saviour of the 21st century?'

For the past 30 years, China has been consistently growing at double or triple the rate found in the developed world. In 2007 China contributed more to the growth of the world economy than the US. The budget for the 2008 Beijing Olympics is 2.5 times that for the London Olympics in 2012. It sometimes seems that China is becoming more economically dynamic than the West. Some commentators fear competition from this new economic superpower, and even worry that China is about to ‘take over’ from the West. But is there more to the story of Chinese economic power than hits the headlines?

Much of the hype about the Chinese economy seems over-stated, distorted by both fear and jealousy. For example, America’s economy is currently four times the size of China’s and Chinese productivity is still far behind Western countries. Chinese industry is dominated by low-productivity, labour-intensive manufacture. Rather than simply competing against Western economies, China is increasingly integrated into a global economy, benefitting from access to the developed markets of the West, while the developed world benefits from cheaper products. Similarly, the vast funds China is accumulating from exports are also supporting investments in the developed world. It is also argued that the West has the trump hand on ‘ingenuity’, and retains a grip on capital and knowledge intensive sectors like the pharmaceutical industry. But will a growing China begin to upset the global division of labour, and challenge the West on its own terms? As the West becomes more risk-averse and regulated, will China’s dynamism spur it on to scientific and technological breakthroughs we could only dream of? Is China playing catch up, or might it begin to take a lead in the global economy?


Sunday 27 April 2008

Joe Kaplinsky, co-author of Energise!, introduced 'Food and Commodities Inflation'

The world has recently witnessed continued inflation in the prices for many of the commodities that are increasingly demanded in greater supply by the world’s emerging economies. What will the effect be for the global economy, and for the world’s most vulnerable people if food price inflation is here to stay?

Commodity prices have spiralled dramatically over recent years. The world’s poorest economies have generally benefited from increased demand for and prices of their exports, at the expense of the rich world. Does the prospect of inflation of food prices threaten to hit the world’s poorest economies hardest while leaving the wealthy untouched?

Recent inflation in food prices has led some to warn of the impact of rising prosperity of consumers in the world’s developing nations. How much does the current bout of inflation have to do with increased affluence in the world’s emerging economies, or even the increased use of farm land for biofuels?

‘Recent price jumps appear to have more in common with historic factors, such as poor harvests or animal disease, than they do with 21st century phenomena’

Should we take the current inflation of prices as a warning of things to come? Is now the time to asses the consequences of coming affluence amongst the world’s poor?


Sunday 30 March 2008

Daniel Ben-Ami, finance and economics journalist and author, Cowardly Capitalism: The Myth of the Global Financial Casino introduced 'Global Equality'

The growth of the emerging economies has captivated imaginations, leading to speculation that the gap between the rich world and the poor may finally be closing. But away from the headline figures is there a more complex story to be understood?

Growth remains uneven, both within and between the economies of the developing world. Commentators point to those that are being left behind. Many countries remain trapped in poverty and are seeing their way out blocked by fierce competition from their more dynamic neighbours around the globe. Are the new textile factories in China increasing poverty in Nigeria?

The largest of the world’s emerging economies, India and China, have populations greater than the population of the African continent. If these continental economies are viewed more closely the pattern of uneven development we see globally can be seen repeated within their boarders. Various regions, with populations larger than most nations have yet to be touched by the dynamism seen in Mumbai or Shanghai.

Do those who draw attention to such failings merely detract from the benefits of growth, or should their complaints be at the forefront of debate on the nature of development?

Download a summary of the forum: Global Equality (pdf)


Sunday 2 March 2008

Michael Savage, Head of Credit Policy, FMD Credit Risk, Lloyds TSB Corporate Markets, introduced 'The Credit Crunch'

The 'credit crunch' has focused attention on the financial markets and brought into relief the imbalances between emerging economies that create more than they consume, and the developed economies that consume more than they create. Is it a problem that developed economies are so reliant on cheap debt from the east? How might balance be restored? And what is the relationship between the financial economy, which is prone to crashes and crises, and the real economy that seems consistently to be producing more and more stuff?

Download a summary of the forum: The Credit Crunch (pdf)


Sunday 27 January 2008

Stuart Simpson, convenor of the Emerging Economies Forum, introduced ‘Understanding Future Shifts’

The emerging economies will be a major theme for discussion at the January 2008 World Economic Forum in Davos. The potential economic, political and cultural impact of the emerging economies will be discussed under the heading 'Understanding Future Shifts'. The debates that take place in and around Davos will provide the focus for the first Emerging Economies Forum.

Download a summary of the forum: Understanding Future Shifts (pdf)