Wednesday, April 11, 2012 · The New School · New York

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On April 11, 2012 The OLA hosted a presentation of Michael Cohen’s latest publication, Argentina’s Economic Growth and Recovery: The Economy in a Time of Default, at The New School in New York. President of The New School opened the event, followed by Michael Cohen’s presentation, and comments by Professors William Milberg and David Plotke of The New School. The event ended with a lively and engaging question and answer period. The presentation was well attended by New School students and faculty as well as guests from outside The New School.

President Van Zandt opened the evening and remarked that Mr. Cohen’s book engages the economic, development and political science arenas in a new way, which demonstrates a necessary ability to think “outside the box”. He showed great enthusiasm and support for the book and promised to pose challenging questions during the Q&A period.

After President Van Zandt’s opening remarks, Mr. Cohen began his presentation with a short video clip that illustrated the intensity of the December 2001 public protests against Argentina’s government response to the financial crisis. Michael Cohen focused his lecture on five major areas outlined in his research: the crisis itself; the origins and events of the 2001 and 2002 financial crises; the reactions of the financial press and experts from the north; the recovery from the crisis and the four components of Nestor Kirchner’ strategy. He then concluded his presentation with implications for theory and practice and questions for further research. Mr. Cohen noted that, while many books have been written about Argentina’s economy, very few have been written which are accessible to a wider English-speaking audience, a gap which he hoped his latest book would diminish.

Michael Cohen noted that the motivating questions for the book centered on the following: “How could a country which defaulted on its debt – and thus be generally condemned by the international community and assumed not to be able to grow – grow at over 7 percent from 2003 to 2007?” Furthermore, “what did the Argentine experience suggest for development strategies for other countries?” At the root of these inquiries is the greater task of determining how to define Argentina’s crisis – what Argentina was a “case of” – and importantly, how this case can provide insights into alternative strategies of economic management.

The analysis of these questions is framed within two theoretical issues: neo-liberalism and state performance. With respect to neo-liberalism, the book asks how Argentina came to adopt a set of policies that included trade and financial liberalization, deregulation of the labor market, privatization, and fiscal management and whether this adoption of neoliberal policies was inevitable. It explores the regional context within which this occurred and asks, above all, how the performances of these policies in Latin America and Argentina in the 1990s lead to their rejection in many countries throughout the region after 2002. With respect to state performance, the book discusses how the Argentine experience relates to the literature about state performance and state capacity and inquires into what constitutes the developmental state.

Mr. Cohen’s response to the questions he raises is that Argentina’s recovery is not just about economic policy, but also has much to do with a politics and state-building strategy by Néstor Kirchner to rebuild the Argentine state and to reach out to a broad constituency of people. He explained that when Kirchner finished his term on December 10, 2007, he left office with a 70% approval rating. His wife, Cristina Fernandez de Kirchner was elected with 45% of the vote, 22 points ahead of the second place finisher, and the largest margin in Argentine history up to that time. She was re-elected in October 2011 with 54% of the vote; the second place finisher had 14%. Despite enormous political struggle and conflict since 2003, the Kirchner leadership is a story of remarkable political success. This is accentuated further by the more recent fact that in 2011, the Argentine economy grew at 8.9%, far higher than most economies in the world affected by the 2008 global economic crisis.

dsc 0950Mr. Cohen’s thought-provoking presentation was followed by commentary from The New School Professor of Economics and Department Chair, William Milberg. Professor Milberg stated that the book’s account of Argentine political economy is “detailed, nuanced, filled with summaries of political debates and standoffs” and contains a “rich appreciation of the unequal ways in which the economic benefits are shared as the economy recovered from its macroeconomic collapse in 2001.” He then discussed nine tenets of conventional wisdom in economics, which included: the notion that default on foreign debt is economic suicide; that globalization drastically reduces the power of the nation-state and promotes a “one-size-fits-all” policy; that developing countries should avoid specialization that is too reliant on commodities and primary goods; that the commodity boom was the main driver of recovery and growth; that with the rise of China, the autocracy is the most able to promote development; and that the international financial institutions are more powerful than domestic governments. Professor Milberg noted that Cohen’s book addresses debt, exchange rates, fiscal and trade balances, and fiscal and monetary policy in a manner that defies such conventional wisdoms. He compares the idea of the State’s “embedded autonomy” with Mr. Cohen’s own “embedded autonomy” with the Kirchner government and concludes that, while supportive of the government and its efforts at redistribution and poverty alleviation, Mr. Cohen stays true to a clear sense of principles within a distinct analytical frame that reinforces the idea that economic growth alone does not alleviate social inequalities. His main critique is that, while Mr. Cohen covers in detail the current politics of the overvalued exchange rate, inflation, difficulty with capital flight, and the calculation of inflation, he is insufficiently critical of the management of some of these issues. Overall, Professor Milberg calls the book an important treatise on political economy that resounds with a very hopeful view of the possibilities of creativity and innovation in policy-making, poverty reduction and management of urban development while also maintaining a realistic sense of the limits of politics.

The New School Professor of Political Science, David Plotke followed as the final discussant during the book presentation and also provided commentary on Mr. Cohen’s book. He began by marveling at the fact that Mr. Cohen wrote his book in such a short amount of time, considering his responsibilities as Director of the International Affairs Program. In his commentary, Professor Plotke raised several key questions that centered on how Argentina changed the conversation among other countries with respect to democracy and politics. He asked why, in the context of Argentine history, did democratic politics persist post-2002. He also pondered how Argentina, arguably one of the least democratic countries historically at its GDP level, did not produce outcomes typical to its situation and instead, shifted the political economy paradigm. He concluded by stating that Mr. Cohen’s book has also changed the usual terrain — for international, political and economic discussion, and promotes a richer intellectual environment. He closed his commentary with a challenge to navigate through this new environment and develop more positive positions for the future.

The event ended on a high note with an exciting exchange of questions and answers between attendees and guests. Some questions that were addressed include: Why was debt allowed to be forgiven at 25/100? Did the world need the commodities that Argentina had? What gave Kirchner autonomy to pursue these policies? If one lesson to draw from this case is the strong role of the state in taking over, what does this mean vis-à-vis Greece?

Overall, the book presentation was a great success and praised by all who attended.


Read more on this book presentation

+ More information on Argentina’s Economic Growth and Recovery: The Economy in a Time of Default, by Michael Cohen

Read William Milberg’s review of Argentina’s Economic Growth and Recovery by Michael Cohen. Milberg is Professor and Chair of the Department of Economics at The New School for Social Research.

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