Volume 43, Number 171, October-December 2012


revista164The existence of a development path accompanied by an ethical structure in the field of democracy corresponds to a society’s values throughout the economy cycle. The ethical dimension of development inserts an individual in his society and provides the collective social transformation project with purpose, as well as contributes to fulfilling multiple and diverse life projects. Democracy is what makes the transformative dynamic of diversity possible in development.

In the area of economic development, we face two main theoretical economic schools of thought. Economics of free choice based on the “rational man,” which is today Davos, and on the other hand, social economics, where men and women have feelings and political performance (active or passive) in society with desires and challenges. Both schools of thought pose an implicit or explicit ethical dimension, even if the expression of the objectives of both ways of thinking is to reach a society with social well-being. The confrontation between these two asymmetrical visions of economics, as in many other areas of development, requires a political game in democratic regimes. Society elects its leaders seeking full employment and human economic rights worthy of human beings, although the routes to reach these goals are extremely different. The elected governments do not always respond to the population’s desires, and it is even less likely to do so when democratic mediation in the expression of diversities in the development project is the driving force.

The current crisis has taught us a strong lesson regarding the different expression of economic interests that go beyond democratic governments and respond to a regime of financial accumulation. Economic globalization existed before the crisis, and was the reason why the crisis was especially global. Thus, the role of international institutions such as the G20 (precisely born at the crisis at the end of the last century) became more important, and at the same time, the ability to act and reorganize the domestic financial lives of each of the national democracies increased. This new dimension and expression of power challenges each national democracy and compromises the development projects and their respective actors.

The foundation of democracy is to satisfy the needs of a society with social justice. However, as democracy has responded to the interests of dominant economic agents in the financial market during this economic crisis, it has shown a radical break. Employment restrictions, income reductions and the imposition of radical measures to sustain profits for institutional investors have resulted in broken international circuits. The productive chains are broken. The businessman’s profit, whose logic is to expand production, increase investment and employment, has come to a stop and is falling or disappearing. Businesses end up closing the door on employment. A large part of the population passes into the realm of unemployment. The depression deepens and the economic cycle reaches its lowest point. It is at that moment when the democratic regime, pushed to its limits, seeks alternatives to satisfy the interests of all economic agents.

But from the Schumpeterian point of view, new combinations accompany the economic cycle, where technological innovation displaces former producers. Boom follows depression. Creative destruction once again results in new companies, greater profits and more employment. A series of superimposed cycles of the productive process shows us the economic development of an economy in movement, anything but static. However, in recent years, the economic cycle has been fractured. The gdp has fallen on a global level, we have seen recurring recessions and a deflationary process on assets that has sidelined us towards what could be a great depression. Is this like the crack of 1929 that John K. Galbraith described? No, the answer is completely negative. Because unlike the 1930s, today there is a monetary system, instituted in the post-war period, which responds to the interests of capitalist profiteers. Financial profits have come at the cost of decreasing income for workers and reducing jobs. Destruction of the human habitat and damage to the environment. A complex crisis. This is not only financial, it is a crisis of production.

In the context of democracy and development programs of democratic regimes, proposing the economic right to employment as an inalienable human right would restore ethical economics, lead to a boom in the economic cycle and reinstate productive chains. The key for this goal would of course not be a minimalist State, but rather a big government whose vision is found in Minsky. Today, going back to Keynes means putting the well-being of our societies in the hands of democracy and ethics.

In this edition of the journal, the article “Theories of Capitalist Development: A Comparative Evaluation,” by Ignacio Trucco, opens a debate regarding development in the twentieth century. He discusses the Weberian approach between growth models and the duality of the traditional/modern society. He redefines the terms of the dominant paradigm in the context of development theory. The author mentions how development theory was rewritten on the basis of recovering neoclassical assumptions regarding capitalist societies and their inherent methodologies.

Prices are one of the most important foundations of the development debate. In “Credit Rationing: A Perspective from New Keynesian Economics,” Abigail Rodríguez and Francisco Venegas explain that for this school of thought, the most common explanation of imbalance is price rigidity. In the case of labor market imbalances, the nke proposal has two variants: on the one hand, it tries to show that involuntary unemployment is the result of the endogenous rigidity of the real salary (efficient salary models, implicit contracts and salary negotiation). On the other hand, it affirms that the origin of unemployment is the rigidity of nominal salaries (models of coordination errors and menu costs). The purpose of this research is to analyze alternative explanations for credit rationing in the framework of New Keynesian Economics and to classify these contributions, as well as to demonstrate the weaknesses of each approach, which is the multiplicity of base hypotheses and the absence of convincing explanations regarding the link between the credit market, monetary policy and the real sector.

Bibiana, Medialdea, author of “Structural Limits on Economic Development: Brazil (1950 – 2005),” uses the distinction between development and underdevelopment in classical political economics. Contributions from Smith, Ricardo and Marx based on the accumulation process allow for analysis of the development border in Brazil. The author highlights the period of the so-called Brazilian miracle between the 1950s and 1980s as the years of highest growth and economic transformation. Despite this growth, structural restrictions did not allow for greater investment, given weak savings. As such, insufficient savings are an obstacle to investment that limits economic development.

The authors Eduardo Bastian and Elena Soihet compare two post-crisis paths of development with different models in their article “Argentina and Brazil: Macroeconomic Challenges.” After 1999, Brazil’s macroeconomic regime was based on a tripod made up of inflation goals, a flexible exchange rate and primary surpluses in public accounts. After 2002, Argentina had fewer options as a result of the Monetary Council, and a lower margin to maneuver and select a new macroeconomic regime.

Cecilia Vitto’s article “The Third Peronist Government’s Economic Plan: Gelbard’s Term (1973-1974)” is extremely important, as it returns to the third Peronist government’s economic program, the Triennial Plan for National Reconstruction and Liberation, based on comprehensive economic planning to foster national development and multiple aspects of economic life. Economic independence was a priority goal in restructuring Argentinean capital based on strengthening the “national bourgeoisie” in comparison to sectors where foreign capital was predominant and the “diversified oligarchy.” The deterioration in the trade balance in 1974 made clear the structural deficiencies of the Argentinean economy and its difficulties in the international context to maintain the Social Pact. Rebuilding the country with self-sufficient structures would have created the foundation for economic independence.

“Maquiladora Factors and Household Income in Yucatán” is a study on regional development, authored by Javier Becerril, Rafael Ortiz and Lilian Albornoz. This study addresses the well-being of four municipal territories: Cuzamá, Homún, Acanceh and Huhí. It makes clear the elevated heterogeneity of the patterns of well-being in the country. Still, there are certain areas that show signs of regional economic development. The data and information used in this study are part of the “Rural Dynamic Territories Program” research project, which involves analyzing the typology of rural territories based on improvements or reductions in the level of well-being on the municipal level for the period 1990-2005. Two indicators were estimated when measuring the levels of well-being: per capita consumption and incidence of poverty.

In the commentary section, Arturo Bonilla describes one of the most significant models of economic development in the twentieth century: historic transformation of Tsarist Russia to the Union of Soviet Socialist Republics and the Russian Federal Republic. Following the 1917 revolution, economic surplus was oriented towards heavy industry to develop a war industry in the context of a dispute over the mode of capitalist production. The choice to maintain a socialist mode of production following the Second World War resulted in the Cold War, which characterized a period of more than seven decades between the United States and the Soviet Union, and between the European Union and the Comecon. On the other hand, Soviet intervention in Afghanistan enormously weakened the two great powers on the world level. The Perestroika did not transform the structural bases to achieve better income and opportunities in modern times.

The journal closes with five reviews: “Technological Plans, Labor Relations and Social Responsibility in the Mexican Business Sector,” coordinated by Carmen del Valle and Boris Marañón and reviewed by María Elena Vargas; “The Long Road to Crisis. Central and Peripheral Countries and Transformations to the Global Economy,” from the author Enrique Arceo, reviewed by Ana Laura Rodríguez; “Depletion of Large Oil Fields and New Potential for Hydrocarbons in Mexico,” by Fabio Barbosa, reviewed by Héctor González Lima; “The Collaborative Construction of Knowledge,” a book coordinated by Gunnar Wolf and Alejandro Miranda, reviewed by Santiago Hernández; and finally the book “Critical History of the imf,” by Óscar Ugarteche, reviewed by José Luis Maya.

Alicia Girón
Journal Editor
unam, September 2012

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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 194 July-September 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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