A little belatedly, some thoughts on After the New Economy. Other Timberites are still in the throes of writing their posts, so we’ll do a linkage post pulling the various responses together (as well as the responses of non-CT people such as Brad DeLong), when we’ve all reported. First take – this is a very good book indeed. It provides a trenchant response, not only to the New Economy hype, but also to the political project that it implies. Most importantly (and unusually, for a book about the US economy) it’s solidly based in a comparative framework, examining not only the relationship between the US and the world economy, but also showing that the experience from other countries (European social democracies) suggests that large welfare states aren’t necessarily a drag on growth. Brad DeLong notes somewhere or another on his blog that the economic success of the statist Scandinavians is a real puzzle for economic theory; this is something that should give pause to gung-ho US advocates of unfettered free markets, but rarely does. It’s nice to see the lesson being drawn out in a book that isn’t aimed at an academic audience. Furthermore, as Kieran has already noted, After the New Economy avoids falling into the trap of bucolic communitarianism; Henwood makes a guarded – but thoughtfully argued – case for the potential benefits of globalization for societies in both the West and the developing world. He’s right on all fronts, I think – but there’s still something missing in the book, which reflects a wider absence in the political debate. Not only is there not much in the way of a pro-globalization left; what there is doesn’t have much in the way of a positive alternative vision to offer. This means that Henwood is able to make a strong case for the prosecution, but doesn’t have very many positive arguments to defend his own vision of globalization.
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