Still All Quiet On the Western Front?

by Henry Farrell on June 2, 2009

“Matthew Yglesias”: does Martin Feldstein a serious injustice.

Feldstein’s characterization of the bill isn’t really correct and some of his economic analysis is debatable. But beyond that, the key point on which Feldstein’s argument turns actually has nothing whatsoever to do with economics. … Feldstein’s hypothesis … is clearly a proposition about _international relations_ … Presumably the reason the Post is interested in Feldstein is his expertise in economics. So there’s no reason for them to be running an op-ed whose key contention has nothing to do with economics.

Matt is clearly unaware of Feldstein’s distinguished record as a theorist of international relations (this may not be as distinguished as his research record on “the relationship between Social Security and savings”:, but you can only do what you can do). Feldstein is particularly famous (well, famous is one way of putting it), for his suggestion in a 1997 “Foreign Affairs article”: that the introduction of the euro might lead to a civil war that would tear Europe apart.

War within Europe itself would be abhorrent but not impossible. The conflicts over economic policies and interference with national sovereignty could reinforce long-standing animosities based on history, nationality, and religion. Germany’s assertion that it needs to be contained in a larger European political entity is itself a warning. Would such a structure contain Germany, or tempt it to exercise hegemonic leadership?

A critical feature of the EU in general and EMU in particular is that there is no legitimate way for a member to withdraw. This is a marriage made in heaven that must last forever. But if countries discover that the shift to a single currency is hurting their economies and that the new political arrangements also are not to their liking, some of them will want to leave. The majority may not look kindly on secession, either out of economic self-interest or a more general concern about the stability of the entire union. The American experience with the secession of the South may contain some lessons about the danger of a treaty or constitution that has no exits.

The carpers and the hurlers on the ditch might complain that Jean-Yves Reb hasn’t reached for his rifle in the intervening ten years, and doesn’t look like he’s going to anytime in the foreseeable future. But that would be to miss the point that Feldstein’s contribution spurred “much”: “spirited”: “discussion”: among international relations scholars, and specialists on the European Union (most of it not very complimentary to Professor Feldstein, but again, you can only do what you can do).

The Basic Income Grant Experiment in Namibia

by Ingrid Robeyns on June 2, 2009

One could debate and dispute whether implementing a Basic Income Grant would be a good idea in affluent post-industrial societies, as we did (“here”: and “here”: and “here”: at CT before. Yet for developing societies with serious problems of persistent poverty, it seems to me like a very good idea indeed. One could add as a (desirable) condition that such a society should be able to internally generate the money to fund such a BIG (that is, there must be a big enough section of rich or middle class people whose consumption or income can be taxed). The idea may work wonderfully in countries like South Africa for example. If you give poor South Africans a relatively tiny BIG, they are not given welfare payouts that enable them to sit back and rest (as the critics may have it), but rather people are given some very basic means to take their lives in their own hands: money for food, for basic health care, for school fees, for a roof above their head, and perhaps to set up a small business. No more begging for food needed. The amounts can be tiny and may seem like pocketmoney to people in the global North, but as we know from the relative success of microcredits, poor people can change their lives (and those of their children) when they have small amounts of money.

There is now empirical evidence supporting this line of reasoning, coming from Namibia, where in 2004 “a coalition”: of churches, trade unions, NGOs and AIDS organisations decided to run a pilot project to figure out what a small BIG would do to the lives of the extreme poor.

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