Archive for ‘Dennis Shen’

March 12, 2013

Book Review: Intelligent Governance for the 21st Century


Nicholas Berggruen is an investor and founder of the Nicolas Berggruen Institute that studies the development of more effective systems of governance. Nathan Gardels is editor-in-chief of New Perspectives Quarterly, and senior advisor to the Nicolas Berggruen Institute. In Intelligent Governance for the 21st Century, Berggruen and Gardels critically compare the West’s liberal democracy and the East’s meritocracy. Can we learn from both?

Intelligent Governance For The 21st Century. Polity Press. 2013.

Reviewed by: Dennis Shen

Is there a middle way between China’s meritocratic single-party system and the United States’ multi-party liberal democracy? This is the question that authors’ Nicolas Berggruen and Nathan Gardels ask in their provocative book, Intelligent Governance for the 21st Century.

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January 29, 2013

Has the Global Economic System “Raised All Boats”?

Written By: Dennis Shen, Raktim Roy and Joséphine Gantois

The design of a global economic system that supports inclusive growth is central to today’s policy debate. The current global economic model has been in-place since the 1980s: the decade in which free market thinking revolutionized the world economy. The neoliberal system adopted since that time has engineered a world with less trade barriers, globalized markets, and minimal government intervention – based on the belief that a pro-market, anti-governance approach would support human welfare. Globalization has been an important outcome, and has re-shaped our lives.

Now, there exists an active debate on whether the neoliberal system has been a success. Proponents of globalization and free trade would say that the world is the better for it – proponents like Martin Wolf write that inequality and poverty are declining in large part due to globalization forces. But on the other end, outspoken voices like Robert Wade at the London School of Economics would say that rather than supporting lower inequality and improvements in welfare, the current system has in many ways held the rich countries up and the poor countries down.

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October 8, 2012

Growth and Inequality: Analyzing an Important Relationship

Written By: Dennis Shen

In academic circles, it has become commonly accepted that rapid economic growth can increase inequality. This has been supported by international developments in recent decades that show declining inequality between countries but increasing inequality within countries. China and the United States are just two examples. To explain the reason, some point to globalization as the natural conduit not only for high growth and inter-country convergence but also the agent for downward domestic pressures on working class payrolls, capping wage increases in response to international labor competition and resulting in intra-country divergence.  Others have argued that unregulated laissez-faire economics is both an apparatus for rapid economic advances and the natural environment for the development of a Darwinian economy (see Robert Frank’s “The Darwin Economy”) of winners and losers across an increasingly segmented income distribution, requiring a strong state to intervene and re-balance.

In a recent article on Project Syndicate (link here), Columbia professor Alexander Stille acknowledged this accepted relationship between rapid economic growth and increasing inequality, but also interestingly pointed to a novel alternative hypothesis: in addition to rapid growth driving rising inequality, could times of relatively weak growth also be associated with the very same inequality phenomena? As Stille writes, “might slow growth and rising inequality – the two most salient characteristics of developed economies nowadays – also be connected?” At first, it would seem counter-intuitive that very weak growth be commonly associated.

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February 22, 2012

The Crisis of the Commons

Written by: Dennis Shen

The crisis of the natural commons – our forests, our waterways, our skies, our marine fisheries, our biodiversity – is rooted in an existing failure of the international economic and regulatory system to internalize a critical externality. It reflects a system deficiency to place a price and regulate the use of the earth’s depletable and valuable natural ecosystems in a time in which continued freedom to over-use may pose real risk to the sustainability of these natural systems and in turn, the sustainability of our long-term economic path.

In 1776, Adam Smith, in the Wealth of Nations, stated that an individual, by pursuing his own interest, will be “led by an invisible hand to promote an end which was no part of his intention.” And in the case of private, tradable goods – the invisible hand of competitive markets has, in testament, done wonders to foster the efficient exchange of assets and maximize the product of human labour. But the marketplace works under assigned boundaries and if the current rules state the goal to be maximum short-term exploitation at the cost of long-term consequences, then that is exactly what the markets will institute into practice.

The reason a sustainable architecture to our global economy (that internalizes the price of common goods) has been difficult to come by is in part due to the historical misconception that the natural ecosystems are so vast that they cannot possibly be significantly influenced by man – a misconception founded on a history of people in which exploitation of nature has seemingly taken place without boundary or repercussion.

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February 1, 2012

Capitalism and Corporatocracy: Money in Politics in the United States

Written By: Dennis Shen

Capitalism and democracy are often characterized as the twin virtues that have defined America’s modern history and success.  But capitalism and democracy do not exist in uniformity: to be more capitalistic does not invariably make us more democratic.  Instead, there has always existed an intricate balance between free market principles and strong democratic governance, oftentimes counterbalancing one another, that has determined the long-run health and sustainability of a political and economic system.  America’s past success in becoming the world’s leading nation was founded and sustained by its managing this balance between private markets and government better than perhaps any other country in history.  The ingenuity and allocative efficiency of free markets in partnership with the vision and moral leadership of a strong American government helped design the modern world and make it in the image of a fair and decent people.

But this balance between markets and government can break down if not very carefully maintained.  At the core of America’s problems today is an existing imbalance of too much dependence on unregulated, free market capitalism and too little government oversight and leadership.

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