 Is that okay? Can you hear me? Okay. So the title of the talk might seem perverse. Osborne keeps telling us that this is the fifth largest economy in the world and it's growing strongly. And you might ask, what's that got to do with underdevelopment? And particularly, what do the ideas of a largely forgotten economist from the 60s have to do with that? I think reasonable questions. And I'm basically not going to answer them in any full way but hope to provoke and to ask at least to see whether you think the questions are reasonable. And I'll do this in three parts. First, a short account of Andrew Gounder Frank's work who coined the phrase. Secondly, a short discussion or perhaps not so short discussion how far we might see his theses as applicable to the UK in which I conclude that at least it throws some interesting light on what is happening in the UK perhaps as interesting as anything Mr. Osborne had to say in his speech in the autumn. And lastly, a short discussion of why to the extent that these ideas do shed interesting light on what's happening and how few people look at this country or perhaps any country much now through the optic of Andrew Gounder Frank. Now a few words about him. He died in 2005 and I'm told that at the memorial for him in Oxford the chief eulogist couldn't think of anything nice to say about him as a person. I also remember meeting someone who had worked with him in Chile who hated him because he would bring her up at two in the morning with a new idea, ask her opinion of it. And there's no doubt he was self-absorbed and difficult, a bit confrontational, but he was also charming and could be stimulating and I only knew him a bit towards the end of his life and I never had to put up with him for very long but I liked him. As a young economist trained in Chicago he set about offering a root and branch attack on the American theory of development that dominated the time, modernization theory, the idea that underdeveloped countries were still in or still close to a once original state, a state that developed countries had once been in themselves and that to become developed they had to pass through a series of stages with the help of benevolent aid from the developed countries until they too arrived at what Rosto called high mass consumption society, a view which sometimes strikes me as relatively alive and well in official circles in this country. He pointed out that throughout recorded history Latin America had been deeply marked by subordination to external powers and for him the term underdeveloped was not a euphemism for poverty as it was for the World Bank for a while or a label for a low level of development. For him it meant subordinate development and if all he'd done was to propose this way of conceptualizing development he would not have made a stir but he considered it his scientific and political duty to demonstrate in considerable detail just how modernization theory was wrong and his long 1966 article sociology of development underdevelopment sociology of sociology was a closely argued demolition of the leading lights of modernization theory at the time from Tolka Parsons through Everett Hagan, Daniel Lerner, Bert Hosellitz, Walt Roslow, Rosto and David MacLennan and by implication it was therefore also a critique of most of the work of American academics who were working on development at that time and this was not calculated to make him popular. The collective academic response in the USA was not to review his books. If students nonetheless got hold of them and thought they made sense the response in academia was to dismiss him or indeed the student concerned and I witnessed this myself at the tail end of the 50s when you were living in a post-McCarthy atmosphere in which denouncing people for their allegedly socialist views was enough to a new good marks. So what are the main elements of... Is that going to do it? There is Andrew Gundefrank as he was in the last ten years of his life and here are the main elements of his thesis. The extraction, it really has three elements. One is the notion of the extraction of surfaces. Secondly, the structuration of the local economy for the purposes of external capital. Reliance on cheap, unskilled or low-skilled labour, limited internal markets, dependence on the production of a small range of primary products for export, making the economy vulnerable to adverse terms of trade. Enclaves of high consumption elites in the capital consuming imported goods. A transport system geared to export and limiting production for the internal market. And thirdly, the formation of a local class whose interests are aligned with those of external capital, so-called Comprador class. The business wing of this class facilitated capital's exercise of economic or market power while its political wing facilitated foreign capital's control of the state. Combination captured in the label Banana Republic. On the second point of this thesis, the structure of a typical underdeveloped country, there was little argument. Dependence on unskilled labour, low levels of literacy and education and limited internal market and so forth were agreed to be problems to overcome. The difference between Frank and the mainstream was over the causes. The modernization school saw these economic structures as the result of original conditions and their societies as being still enthralled to traditional ascribed rather than chief roles. In contrast, Frank and his Latin American colleagues saw nothing original or innate in the situation. They saw the economy and society as shaped by the extraction of surplus. For them, the key feature was the extraction of surplus. Whereas for modernization theorists, the solution to underdevelopment was to supply capital and know how from abroad, they pointed out that there was actually a net outflow of capital from Latin America to the United States in particular. And moreover, at a large part of the inward investment in Latin America was reinvested surplus from the local operations of foreign companies. If this idea is now part of common sense, it wasn't at the time and Frank played a significant part in popularizing and getting it understood. As for a compradour class, here the difference was fundamental. The modernizers saw the educated businessmen, politicians and civil servants of the former colonies as elites who needed support and training to enable them to modernize their countries. Frank saw them as a local ruling class not in modernizing the national economy but in making money by assisting or at least not opposing capital and accumulation and capital export by foreign companies. If development was to replace underdevelopment, this class needed to be replaced by a popular class alliance an alliance of classes with an interest in national development. A key element in this putative alliance of classes was to be the so-called progressive national bourgeoisie. Progressive in two senses. First, in the historical sense of a capitalist class seeking to replace frugal or other pre-capitalist relations of production with capitalist relations and so transforming the productive potential of the country. And second, and therefore also progressive in a political sense of being ready to make alliances with the peasantry and wage workers in order to overcome the political power of the compredor class. This account of Frank's concept of underdevelopment is of course totally simplified and stylized but my aim is not to ask how valid it was for that era but to ask if it could shine any light on the situation in Britain today. Does it make any sense to see the UK as underdeveloped in the sense that Frank was using? Obviously, this is not a country with a large low-paid unskilled rural workforce. It doesn't lack a domestic market capable of making industrial production profitable. Its transport system was not geared to the export of primary commodities. It never used to be underdeveloped. On the contrary, it was an active underdeveloper of other countries as Walter Rodney put it in his book, How Europe Underdeveloped Africa. But it's hardly controversial that after 1945 Britain ceased to play the role of a metropole to other countries and itself became increasingly a satellite of the USA. What Lenin would have called a quasi-colony but what in polite circles is called the special relationship. But has this role reversal led to the development of underdevelopment in the UK? Is there any insight to be gained from asking this question? Before trying to answer it, I want to make a brief digression. We should remind ourselves that such a reversal of roles from metropole to satellite is something Frank himself came to consider a normal indeed constant feature of world history. After moving from Latin America to Europe in 1973, following the coup in Chile, he no longer focused exclusively on the problems of ex-colonial countries. Instead, he came to see the whole of world history as an unending sequence of successive metropolis satellite systems from formal empires to informal systems of tribute and unequal exchange such as Britain's so-called empire of free trade to today's informal American financial empire. In 1995, he summed up his world view as follows. I now find the same continuing world system including its center periphery structure, hegemony rivalry competition, and cyclicals ups and downs has been evolving, question developing, for 5,000 years at least. In this world system, sectors, regions and peoples temporarily and cyclically assume leading and hegemonic central or core positions of social and technological development, they then have to cede their pride of place to new ones who replace them. So Frank would have had no problem with the idea that the UK has now become an under-developing and perhaps under-developed country. On the contrary, he not only looked at it that way himself but reported that it was his teenage son who noticed it first. And he wrote in a memoir in that year. In 1979, soon after we'd arrived in England from Germany, my youngest son Miguel, observed England is an under-developing country. I ran to my class to tell my British students who were incredulous. After several years of British de-unjust realisation under the government of Mrs. Thatcher, I repeated Miguel's early observation to a later generation of students who reacted then, of course. Okay, so let's now look at Britain a little bit through the optic of Frank's thesis. As far as I know, Frank never did this systematically and I don't intend to either. But the question is, does that framework illuminate what is going on or has been going on here since 1945? And to do that, I ask basically three questions derived from Frank's model. How far is surplus being extracted? How far is the structure marked by under-development? And how far can the British ruling class be understood as a compradour class? So first on the issue of surplus extraction, here is from the Office for National Statistics, the percentage of UK stock market owned by foreigners over the years from 1963 to 2014. And by 2014, more than half of it was foreign-owned and within that half, 46% was owned by Americans. Then there's the question of takeovers. Of course, there were lots of foreign companies operating in Britain, from Ford and General Motors to Colgate and Starbucks and Goldman Sachs. But there are also many companies, which we think of as British companies, which have passed into foreign hands, including quite a few household names. Of course, British capitalists also own companies in foreign countries. And that graph, also from ONS, represents the difference between value of assets owned by British capitalists abroad and those in Britain owned by foreign capitalists. And with the exception of Spike in 2009, it's been negative since the 90s. But since the 1980s, these holdings by British capitalists abroad have been significantly smaller than foreigners' holdings in Britain. The gap is equivalent to about a quarter of British GDP. It's pretty substantial. And in the last few years, the rate of return on the foreign assets of British investors has been lower than the return to foreign owners of British assets. And this helps, according to the ONS, to account for the dip in the red graph, which is investment income in the years since the crash, since 2011. And which shows up in the extremely adverse current account, the green line on that chart, which is now down at an annual deficit overall on current account of 5% of GDP, which means annual, essentially, borrowing from abroad at a massive scale, which clearly is not sustainable in the long run. Essentially, what it's saying is that Britain is a detonation on a grand scale. I'll come back to the role of debt in a moment, but to finish with the issue of surplus extraction, I'm not an economist, and I don't know if there is a net outflow of surplus from the UK economy. Perhaps someone here can tell us. But it doesn't seem absurd to think that something like the central element of underdevelopment, as conceived by Frank, might apply here today. Okay, secondly, now moving to the structure of the economy. Of course, our economy bears no resemblance to a classical ex-colonial, ex-third world economy of the kind that Frank and other underdevelopment theorists were looking at in the 60s, although that might make an interesting set of comparisons to explore. For example, the economy doesn't rely primarily on a massive unskilled labour, but you could see the steady growth of a large unemployed or underemployed and precarious segment of the workforce as forming part of the global pool of surplus labour, which is gradually setting a new, globally determined, subsistence wage. In mid-2015, 1.8 million people were unemployed and looking for work, and of those who accounted as being in work, over a quarter have part-time jobs, and 1.4 million of these are working part-time because well-time work isn't available. And this is also true of the many among the 16% of who are in work and who are self-employed. Some of these, effectively, have left the labour market but regarded themselves as self-employed. And average self-employed earnings have fallen by a fifth since 2008. But that's somewhat about digression. The most obvious structural feature of the UK economy is the dominant role of finance concentrated in the City of London, the world's largest currency transaction centre and the second-largest bond trading sector. The City of London itself is now predominantly foreign-owned. Eleven of the largest 14 investment banks, three of the five biggest retail banks are foreign-owned and most of the staff at Canary Wharf are foreign. In this context, it's important to remind ourselves that the City of London, the financial district, is not integrated into the British economy. Lending to British companies is not a significant part of its business. It's a global financial centre that happens to be located here. It might as well be located in Paris or Qatar or anywhere with good IT services from a technical point of view. It is counted as part of the UK economy, for good reasons, for statistical purposes too, and this gives a misleading impression of the strength of the rest of the UK economy. Financial sector accounts for 10% of GDP. If we took the City of London and its supply chain out of it, the weaknesses in the rest of the economy would become clearer. The transformation of the City of London into this global financial centre is recent. It had existed for 300 years as the financial centre of the British Empire. But in 1986, the Thatcher government decided to convert it into an international financial centre for the new global economy. And it was able to do this primarily by subjecting it to weaker regulation than New York, Hong Kong or Tokyo, and so giving it an advantage. It was already an offshore centre for so-called euro dollars. It now expanded dramatically and also became increasingly corrupt, as evidenced by a series of scandals from the rigging of LIBOR, the insurance protection racket and the rigging of the foreign exchange market. Regulation continues to be weak. The manipulation of foreign exchange alone is estimated to have cost British pensioners £7.5 billion a year over 10 years, yet no one has gone to jail. The UK is now also recognised as a global hub for laundering criminal money and with its various island dependencies is an offshore tax haven on the grand scale too. So, while the UK is not a banana republic, we could perhaps call it an offshore monarchy, which to my mind is almost more embarrassing. From a socioeconomic point of view too, the city of London is also an enclave, like the post-colonial capitals and mining enclaves of Africa and Latin America. Becoming a home to a leading global financial centre is turning central London into a distinctive habitus of luxury living with a service workforce commuting in from the outer edges and beyond, like the service classes that commute daily from the townships of Johannesburg and the Favénice of Rio. In another echo of the original underdevelopment literature, we could also see the public transport system beginning to be underdeveloped to serve this enclave rather than the needs of the national economy. We could also see the debate over crossrail and HS2 rather than having a modernised rail system for the ex-industrial north. So, at many points then, we find the UK's economic structure marked by the dominance of the city of London, which is largely foreign-owned and it's hard to think of a major field of economic or social policy that doesn't reflect the city's influence. It's opposition to tax reform in general and specifically to a financial transaction tax and reform of the taxing of multinationals. It's opposition to curbs on the bonus culture and its role in promoting grotesque levels of income inequality. It's demand for a reduction in state spending. It seems to me reasonable to conclude that the UK's economic structure does reflect underdevelopment very much in the way that Frank understood it in Latin America in the 1960s. So, next, is the ruling class a compredor class? The simplest way to answer this question is to notice the almost complete lack of a class of progressive national capitalists in the United Kingdom. It's hard to name a single businessman, banker or politician who thinks foreign ownership of the economy is problematic. A rare exception to this is Alex Brummer, the city editor of the Daily Mail. In his book, Prussian for Sale, published in 2012, he wrote that he thought he was detecting a change of opinion in ruling class circles. But he could cite at that time the names of only two or three people who had begun even tentatively to be concerned about the implications for the future of allowing control of the economy so comprehensively into foreign hands. Everyone else was positively enthusiastic about it. Yet, as Brummer points out, control is everything. He quotes an engineer, Sir Alan Rudge, who argues as follows, why does ownership matter? As those who have experienced corporate life will readily recognize the key issues linked to ownership are those of basic control. Ownership inevitably affects strategy, investment, taxes and where they are paid, employment, procurement, group synergies, research and development, stock exchange listing, diversification and location of operations, choice of products and markets and prospects for senior management. The location and culture of the controllers of the business are important and will over time have a fundamental impact on the future of the business, to which one could only add not just the future of the business. If a wide range of businesses are foreign-owned, it is the future of the society that is also at stake. If capitalists are not concerned with what their decisions mean for the rest of society or even the overall productivity of the economy as a whole and if state enterprises ruled out, the negative consequences are unavoidable. What's more, if businesses with significant technological assets pass into foreign hands, the effect is like the impact of foreign ownership in colonial economies, leaving them dependent on lower value-added production. And there are some recent takeovers listed by Brahma of high-tech companies in this country. The situation with patents is interesting too. In 2012, 14% of all European Union patients were foreign-owned. 12% of US patients were foreign-owned. 39% of UK patients are foreign-owned. And yet foreign companies only accounted for 13% of the research and development done in the UK. In other words, the social benefits of the exploitation of those UK patients were felt abroad. Foreign ownership also plays some part in the low level of investment in the UK relative to other comparable countries. Britain's rate of investment, that's the yellow line at the bottom in the chart, has been consistently behind that of comparable economies. Also striking is the way in which successive British governments have allowed the country's infrastructure as well as its productive sectors to pass into foreign hands, including into the hands of foreign states. Many of the foreign companies that now own important parts of Britain's infrastructure are themselves partly or even wholly owned by foreign governments. Electrical engineers joke that London's electricity supply has now been renationalised only not by the British government, but by the French government, which owns EDF. Does this matter? I can't go into it now, but there's strong evidence that what these utilities do is provide a hugely profitable monopoly for fast-footed global management companies and finance advisers at the expense of British households. James Meeks' book, Private Island, contains a pretty good analysis of how it works in some sectors. Since the financial crisis of 2007 to 2008, governments have belatedly realised that Britain's extreme dependence on financial services makes its economy vulnerable. Financial services are our monocrop. They have all called for a rebalancing of the economy, by which they mean a revival of manufacturing exports. Mr Osborne has called for a march of the makers and the development of a northern powerhouse. But the government has very little power to bring this about unless it's willing to create publicly-owned manufacturing enterprises, which of course is anathema to neoliberal thinking. Several quite sympathetic reviews in the Financial Times and the Times of the policies so far adopted to stimulate a march of the makers have found no measures that hold out the prospect of accomplishing this. The reality is that foreign owners of companies with serious surpluses and there are some very large ones in the corporate sector at the moment are not interested in rebalancing the British economy or reviving the ex-industrial north. They're only interested in what is profitable. If they're at all influenced by political pressure to preserve or create jobs or to pay their share of taxes, it will be pressure from the governments of the countries where their companies are headquartered and that's where they will do it there. So is the UK ruling class a comparable class? Other OECD countries have capitalist classes that are somewhat more national in outlook. France, Germany, Italy, Spain, Japan and not least the USA, all bar foreign ownership of any enterprise that is considered important to national security or in some sense strategic. And what's considered strategic can be quite flexible. The French government famously designated the yoghurt maker Danone as a strategic company to prevent it being bought by PepsiCo. Whereas when Kraft made its bid for Cadbury the UK government offered no resistance. It's hard not to conclude that the British ruling class plays a significant role in the kind of development Britain is experiencing as Frank's thesis would suggest. You might say it's compredor and proud of it. So there is the case. I think it's not unreasonable to think that since 1945 at least the UK has experienced something like the development of underdevelopment. Its circumstances when this process began were very different from those of Latin America in the 60s but once it began the process has had some comparable effects. Britain's economic and social development has increasingly depended on external forces reflecting external ownership of key economic assets. And although the dominant external forces are heavily concentrated in the USA the underdeveloper is less and less a single country a single metropole but rather the global owners of investable capital wherever they're based. This may prove to be an important difference from Frank's metropole satellite concept but the effects so far don't look that dissimilar. Now finally, if I'll be allowed injury time I'll just say a little bit about why nobody thinks like this now or not many anyway. There are many objections that can be raised to this way of looking at the UK. I'm not out to champion it but it isn't obvious that the questions it poses are unimportant. In my view it at least deserves to be considered. So I find it interesting that so few commentators today draw on a thesis which seems to be relevant to the study of development in Britain or perhaps anywhere. And I wonder why this is. This question could be addressed at several levels. To my mind there is one fundamental reason. Frank's original problematique of the development of underdevelopment rested on the assumption that there were alternatives to the economic system that produced it as represented in practice by the Soviet Union, China, Cuba and a range of variations elsewhere. But these actually existing alternative economic systems have been discredited and abandoned and no seemingly realizable new alternative has been proposed. Underdevelopment has instead become a worldwide phenomenon even if it's not identified as such and the problems it causes tend to be seen as largely insuperable. What are the reasons for that? Well one reason is obvious. The degree of global integration makes it difficult to imagine any purely national alternative. Another is that everyone is acutely aware of the strength of the political forces that can be deployed in support of the interests of the owners of investable funds. But in my view the immediate constraint at least for western democracies lies in the radical change in the nature of representative government that has resulted from the combination of capital mobility and state indebtedness. The best analysis of this I've read is Wolfgang Streik's book Buying Time. Streik's fundamental insight is to focus on the active political role of the global collective of owners of large sums of capital. From the 1980s onwards they were able to secure a steady reduction in their taxes to make up for the resulting shortfall in revenue and to avoid alienating voters by reducing public services and welfare provision and increasing taxes on them instead although that happened too governments started borrowing from the people they used to tax. Meanwhile the owners of capital had also secured the freedom to move their funds wherever in the world turns the highest. The result is that in any given country the owners of investable funds are like a second electorate parallel to the electorate proper. Whereas the resident population exercise power by voting every four or five years the owners of capital exercise power by varying the rate of interest they require for lending their money to the state and they do this on a monthly basis at the bond auctions through which the state keeps renewing the public debt. At any time they think the state may do something they fear could make their money less safe they raise the rate of interest they charge. These creditors of the state are in a stronger position than voters. They vote every month at the auctions and they can take their money elsewhere whereas voters are stuck. Moreover to get them to lend at any given rate you need the confidence of all the lenders but to win elections under the British electoral system especially you only need the support of a minority of the electorate in the 2015 election just 24%. So retaining the confidence of the bond markets standard euphemism for the creditors has become almost more important than retaining the support of voters. What this means is that under development is now a common condition of most countries the only countries which are not chronically subordinate in the new global capitalist system are those where the state is not dependent on debt countries with strong export and a positive balance of payments such as Germany and with ruling classes determined to use this freedom not to give up the freedom of action this provides but for all other countries as governments seek to balance the conflicting demands of the creditors and their voters it would seem futile to ask the kinds of question that Frank originally posed but if that is the case for most countries what is the study of development in most of them about development countries studies were originally distinguished as an academic field by a strong commitment to change to improvement on a radical scale do we now have to say that this is no longer possible that the study of development must now consist simply of identifying the limits within which any country can vary the terms of its ongoing structural adjustment to the requirements of the bond markets that's it thanks very much Colin that's very thought provoking so we'll open it up for questions I think we'll take three or four questions is that okay and then Colin can come back at regular intervals so just raise your hand you can ask your question yes what do you think of the once branded imperial country perhaps yes okay thanks yes Alfredo come back to this one how do you distinguish between the internationalization of the British economy and then of any other comparable economy and the underdevelopment of this economy isn't it just more internationalized than others by the world rather than being subordinate to others not others also connected to this how do you avoid the menace the threat the possibility of a methodologically nationalist point of view where Britain has to be defended from foreign attack for some reason that we need to explain sorry I should have announced just on a completely different topic not a completely different topic but the twitter if you're tweeting the hashtags are so ass devs studies you probably already know and ESRC so I'll take this person over here and then you okay I'll find your argument convincing but I don't know what political position could critique without falling into a nationalism I think if you draw assets and liability if you only look at one side you're going to get a very one sided result and the economic analysis you're given of the character of the British economic establishment is incredibly unsightly I mean if you look at mergers and acquisitions then also has to look at the acquisitions of British companies in the United States and elsewhere in the world if you're looking at major companies outside the finance sector no mention at all of oil companies mining companies the extractive sector and their relationship with finance and the amount of surface value which is being drained from all over the world to Britain through these companies and so on and so forth I mean the one point I do find agreement with the thesis you're arguing of the financial sector and that is crucial for the particularity of Britain but it is also particularly linked with the military power of the British state which again is an aspect of are we an underdeveloped country or not which is completely missing from the analysis if we're talking about political economy the financial power and the military power the two most strongest particularities okay thanks do you want to take those and then we'll take another round I think my response to Alfredo would probably be internationalisation equals underdevelopment if you can't control how it plays out in other words if you simply open your economy up to purchase of any sector you must pay the price socially so then the question is is it nationalist and is that wrong kind of nationalism to be concerned about the social consequences of what foreign owners of the economy will do my view is it is a problem absolutely is a problem that may not be what you are now frankly I didn't get your second second question could you repeat it no it's not a problem okay the methodological methodological nationalism in the analysis and then similar to what others have asked what are the implications of that or in terms of economy well the question also about UKIP the same question we live in nations at the level of social and economic life these through governments which are as in the case of the European Union but also through regional and other arrangements are not completely unconstrained in what they do but they have as representative governments prime responsibility for the welfare of the people who live in it so the question is it a bad kind of nationalism that a government should have those concerns it is you can call it nationalism or you can call it a preoccupation with national security national welfare or equality at the national level and so it seems to me to say as a telling point say people would not like to talk about nationalism so they think it was UKIP and most people would not nationalism has a bad name for obvious historical reasons but anti nationalism of the level of the way it's being handled by successive British governments is not the indifference to with Cadbury's for example is sold by a company that promises to retain breaks the promises it had to the workers within weeks of completing the purchase was that something the government should not have been interested in was it in the national interest that that should happen and would it be considered a bad kind of nationalism to resist that my feeling is it on the wider point that's made at the back I don't pretend to say to offer an analysis on the flows of capital and the flows of surpluses what is interesting I mean your point about oil extraction and other forms of extractive industry is a valid one I mean it's quite interesting that of the top 20 companies in the FTSE 100 only two are manufacturing and the implications of that for domestic employment are significant so that's the point that I'm making is should a government be concerned about the social and economic impact of a completely open economy my view is it should be my view is that it actually are but they haven't done very much about it they haven't thought very well about it other questions yes in fact what's happening is rather than national underdevelopment what's kind of happening is the development of London specifically is then in turn under developing the rest of the UK so the government's focus from just being within London is what's causing wider underdevelopment rather than selling away they're just trying to develop one particular part of the UK which is causing underdevelopment elsewhere I think it's a knock-on effect of the policy of reaching the financial sector and subordinating everything to the interests of that sector at a certain point the attractive power of that development does drain resources away from elsewhere and what is striking is that the government has it in its power to do something to offset that but it's chosen on the whole not to and that choice is rationalised in various ways economically but it's also very clearly in the interests of people who finance the Conservative party which is 50% from the city of London so I mean that's not a very profound comment but I mean that is in fact exactly what Frank meant by a compredor relationship and then you Hi, a question about in and out of the EU in the light of things that you just said would you think that sort of a strategy of leaving the for the UK to leave the EU would be a way of reclaiming ownership or sort of targeting some of the issues that you talked about being exposed to the international influence I don't see that at all I don't see how leaving the EU would enhance our capacity to resist Amazon I mean it's a matter of opinion but that's if you ask me my opinion that's what I think I mean I think in this that comes close to the point of if I if I were to take the position you you offer me it would come close to the position of people who see Brussels as the problem and are quite content to see sovereignty pass into the hands of multinational companies and I don't see that I mean I'm not a fanatic defender of all the structures of the European Union let alone of the Euro but I think we're much better off in terms of the very issues that we're trying to talk about in it you had a question of that yes, Professor my name is Sergio I'm from Brazil I work in university and I teach sociology of development sociology department when I when I read this this developmentism also of course everyone has his own perspective but there is always you came up with the conclusion that the diagnosis is a light some political issue and then you come up with the conclusion that the solution the proposal, the political way out is always a national solution that was the industrialization substitution of imports in the Latin American case well is there room nowadays currently for a kind of national reaction to this global times that's my first question and the second one is as I have the duty to go back in my country and to teach to a student I would like to ask that you can elaborate a little bit further on your last question about what are the challenges today for sociology of development or development studies more broadly when you say that in the past there wasn't a matter to look at the situations and to come up with intervention or suggestion to go to political and today's studies look more the situation, make some diagnosis and just describe the situation most of my colleagues in Latin America because of this exactly goes to post-development, post-colonialism that is a kind of relativism in terms of development studies would you, I would like to hear you a little bit more about what you think on the theoretical perspective for development studies Do you want to take that one now and then another round here I mean these are very good questions and I'm no longer competent if I ever was to respond properly to them on the first one it seems to me it's essential to have a national project within a global project that's basically what I'm arguing about it doesn't have to be a vulgar nationalist project it doesn't have to be a xenophobic nationalist project it mustn't be in fact those things but it shouldn't be a balance between the degree of integration and the degree of subordination that integration brings with it that's my view so I think it's possible and I think thinking about Danone versus Cadbury's is quite an interesting thing to do I mean this is one measure it may not be amazing and it's in a sense kind of ridiculous but it's one measure of some of the latitude that governments do in fact have to secure the interests of their national populations in the context of globalization why should we be a general why should the British government not adopt the same principles as other governments of ring fencing some industries some sectors from open that's my first point the second question is one I would love people here to answer I'm asking myself when I look and I don't do work on development studies anymore I mean on other things but in the sense of when I look at the journals I see a greatly superior degree of precision and scientific and empirical work but I also see a loss of what I would call a kind of emotional and political yes radical impulse behind it I see a field that has become far more sophisticated it had been divided into a multiplicity of subsections and subsectors all of which are studied at a much higher level than was the case in the 60s or even the 70s or 80s so that has happened but what I'm asking myself what is the what do people doing it want how do they differ from people who study non-political even non-social fields is there any longer behind it something that was distinctive in the early days about development studies I don't have an answer but I'd be interested to hear yours thanks Colin Alfredo try to understand the the case which you're making when you started I thought there's no way this is going to provide an interesting explanation of Britain but actually it does there's something very interesting there three kind of randomly picked features of the British political economy amongst the issues that you've raised one an ideology that started off in the period that you've covered as imperial and has morphed curiously into an extreme form of neoliberalism as a dominant ideology of the state second the hegemony of finance described as well in terms of economic policy in terms of ideology and so on in terms of the lack of industrial policy consistently the British state has been negligent or incompetent or unwilling etc to do anything very much particularly since the are these three factors sufficient to cause under development to do is it because under development is the perverse outcome of the hegemony of finance the form of neoliberalism that Britain has and the lack of industrial policy or is this a natural and necessary outcome of that combination of issues and policies it's interesting the way you use the word under development there it seems to me that the expression of under development will vary enormously from place to place the expression of the fact of being subject to external pressures and what you described there is a country where an accumulation or a network of related characteristics produce a rather extreme form of under development to say the exposure of this country the way it will be represented in the OECD open economy that's another way to put it is it okay to be a very open economy without any restriction on its openness and what are the socioeconomic consequences of that I mean the lack of an industrial policy is not is really a chronic feature I mean there have been there were attempts in the Wilson years to have an industrial policy and they were nixed with the global treasury at birth so we never really have had a serious industrial policy the hegemony of finance is also not new what is new is it's the hegemony of global finance we've got Victoria and then you it's a question about under development but that's about specifically I wonder how do we make sense of the relationship between global accounts and balances and the fact that the U.S. is indebted and dependent on the timeline of circumstances in the American economy could you say that nice bit again so I couldn't hear you where you are I would like to comment on the relationship between global accounts and balances and the annual parallelism and particularly the how do we make sense of the fact that the American economy is indebted and we've got a question here and then here you mentioned the northern powerhouse and the distance between national politicians and voters versus national politicians and finance and I just want to ask a question about property, meaningful devolution to local government we're one of the most centralized countries in Europe, only 12% of taxes are raised locally in this country the next lowest in the European Union is and actually there's a growing trend of municipalisation and state owned enterprise in local government in the UK and do you think that could provide with more powers devolved down closer so people are more responsible for their local communities with a cyclical vote, could that provide a counterbalance to the underdevelopment that was one question yes sort of, very good and then this one and then you can answer those three Hi, slightly I'm really doing but as I know that you have written on images I just want to know whether you think that Jeremy Hunt's imposition of contracts to junior doctors can be seen as a step to change or disrupt or even privatize images all good questions what is the core I think I think I said but I probably didn't say it clearly enough that I think that is a big shift from Frank's perspective and it's not obvious to me what consequences will flow from that but clearly they will although the United States is the predominant owner of the capital invested in this country it's by no means an exclusive one in other words we're no longer talking about a geographical core and a periphery related to that core we're talking about a global a global class of capital owners which in some respects does act like a class has class-like characteristics has connections has institutions through which it operates but nonetheless is not located in any one place I mean the point about Tata owning Land Rover is case in point so I don't think we I think that is an important shift the question is is underdevelopment by global capital different in its impact and its consequences for any given country then underdevelopment at the hands of a single metropolis I'm not sure of the answer to that I think case by case you'd have to ask that question on the question of the indebtedness of the United States and its imperial role at the moment I'm not quite sure that the question is is it indebtedness or could you repeat it exactly seems like you were saying that indebtedness is an important feature of underdevelopment I did say that but I said it's true for countries which I mean the United States has special resources which we know which allow it to acquire this debt without being the consequences it's unusual in this respect similar things sort of apply to oil states on a very different scale and very different consequences but most countries that substantial debts are subject to the pressures that that Streak describes and that would be the distinction that I would make for the United States devolution there you are if you can imagine any future British government being serious about devolution then my answer would be yes I think that could be an enormously important break on what has actually been happening the indifference to the social consequences of foreign ownership of productive assets I think that is obviously true but the trend has been so relentlessly the other way and although the present government is talking about abolishing state grants to local authorities for example and handing over the business rates which is another of course poison chalice because business rates vary so dramatically and are typically good in areas that don't need them and feeble in areas that are very deprived but my feeling is that that's not going to happen we're going to get a nominal devolution which is in fact a delegation and is in fact a way of shifting the state out of a lot of responsibilities that it still retains from the welfare state era that to me is the thrust of policy but I completely agree that in a reformed country with a decent constitution which we don't have that all those measures would be fought over and probably reversed support could be motivated it could be mobilised to resist that as for Jeremy Hunt I don't know the answer who was it asking you I don't know the answer I was telling Faisy beforehand that I had an interesting conversation yesterday with John Lister who's a leading expert on health services in London and London has now been told or has been told just before Christmas that it will have a devolution like Manchester has been told how did that come about well Hunt told how did that happen because the health and social care act does not put charge in providing the health service well it's happening because Hunt controls the purse strings to the sort of slush fund that the Treasury makes available and bailing out little bits of the health service as they fall into ever more acute deficits because we've got we've got static revenue and growing demand so it's totally stretched because it's been compartmentalised into trusts which each have to balance their books individually this gives Hunt the leverage to tell people to do things which according to the legislation he doesn't have power he doesn't have why did he impose the contract I think it was a virility test I cannot see any benefit to him in having done that but having said he might do it it seems to me that within the party at least it became important for him to do it and I'm baffled as to what the end game plan is for the crisis that is being inflicted on the NHS so I can't answer your question but I have special insight and the person I hope to tell me yesterday hasn't either Other questions You said that we're kind of shifting towards like a non-geographical do you think we're moving more towards an idea of like corporate economies rather than national economies and I feel like corporations are part of so many different nation states that maybe we should be looking at that kind of those economies and how they interact Okay allowed for this global capitalism to be on the ground because I'm thinking of even Sweden is thinking it's secure and safe so energy, forests are all being sold out in a similar fashion but it's never talked about so I'm wondering if the EU project might have given some sort of false security to allow for such internationalisation of capitalism and the EU would create a sense of false security Of so many decades of peace whether or not the issue of national security has kind of disappeared Let me think about that What's the context of TTIP because that's being negotiated at an EU level Let me deal with this one first and then come back I can't deal with it We have to distinguish between the EU as an idea and an organisation and the people who are currently running it and the ideology which is hegemonic within the EU and you know, if you think of the EU as represented by the leaders who faced down Syriza in Greece This is not the EU as it was conceived and as you know there is no crisis and the EU need to be seen as two potentially separable things and there are a number of movements afoot at the moment to reassert the original conception of the EU and to democratise it and there is a new organisation called Democracy in Europe 25 Democracy in Europe movement 25 it's just been founded by Yanis Varoufakis and others to precisely do that and it's slogan is the EU will be democratised or it will disintegrate and I think a good case can be made for saying that is like that is unfortunately true so while it once may have created a sense of problems being taken care of within which corporate power was relatively unchecked I don't think that's the case in Greece last year it doesn't seem to be the case anymore people are now alert to the real character of the power that's being exercised within the Eurozone which is nearly all of the EU of course so yeah I like I mean I think the idea of looking at the world as a set of corporate economies corporatistic or joint corporate economies is important and it's sobering to think that if you had to have an industrial strategy in this country tomorrow there is very few civil servants left who could implement it who could design it and implement it planning capacity in the state is very very limited it's almost gone because you're not trained to be planners it's not okay to be planners planning is out planning capacity in Amazon or Microsoft is massive so yes I mean I think an optic where you started from what are the plans of a number of dominant corporations that are operating in particular economy and thought about what that means for that economy would be a very interesting project why not I agree with that I've got one over there so can you speak up just a little in the sense that all the characteristics of the domination of finance the decline of industry are actually acute expressions of a continuing form of overdevelopment in the sense that there is still a surplus value coming to Britain it's not hard to show that actually if you ask that question Britain is still a rich country we still have a welfare state in the social sense it's hardly comparable at all to an underdeveloped country and it's slightly morally tendentious to suggest that we are in my view to bring back the radicalness of development studies so I'm trying to say this maybe rather than a sort of a direct switch saying okay there's certain characteristics which we can have shouldn't we also be analysing the condition of overdevelopment as well as other development and what that has brought this time I'm not sure whether this is a problem of semantics because I mean to me it's difficult to argue that Frank means anything except subordinate development in both an economic and a political sense so what would overdevelopment in your usage mean it would be a reassertion or the claim would be that we continue to be an underdeveloper of other countries that's the implication we as a country I'm not sure that that is true clearly British capital is involved in doing that in a number of countries as I said I can't I'm not clear that the balance of capital of profit flows from that is a net one to this country it's not clear to me but you could perhaps show that it is the question would be why do we run such a massive current account deficit are there any other last questions okay developing overdeveloping because I feel like it's quite an emerging power and yet it's not quite considered to be an overarching do you want to answer that as a last question yeah well clearly it's in a transition I mean it would be ridiculous to say it is one thing rather another I mean it is in transition towards a fully capitalist society it is present there's a huge amount of production there that is by foreign companies so there are in some sense it's being underdeveloped at the level of surplus transfer outflows that are taking place but what the most striking thing about China is that it's very nationalist project with investment of a third of the national income for national nationalist if you like for national aims which is absolutely unlike anything that is exactly what the early dependency theorists and the development theorists wanted to happen not necessarily with the Chinese communist style party leadership government but it's very much what they hoped so I would say it's in their language it's not an underdeveloping country it's a very much a developing country so there's a thank Colin then for that wonderful talk and just to say that next week same time same place five o'clock in this room we have Dr Gabriel Palma from Cambridge on why is inequality so unequal across the world sorry that we had to switch those two just for unforeseen circumstances but do join us next week and also we're going to have a reception now in the SCR so you're more than welcome to join us then thanks if anyone's left a national rail card you can come and get it here oh I know who's it is never mind well it was not it was not