Capital and Collusion: The Political Logic of Global Economic Development

This somewhat sanguine view of advanced contemporary capitalist economies is an unsurprising outcome of mainstream analysis because that framework excludes the critical stance associated with alternative radical perspectives. However, many of the institutional and incentive problems that [Root] sees as plaguing developing countries are not necessarily unique to them. For example, a lack of transparency in the corporate structures of companies, and the significant misrepresentation of the financial positions of firms, both of which he considers to be important factors contributing to the poor economic performance of developing countries, also characterize much of the corporate sector in developed countries, as the events of the Enron era attest. A similar case can be made regarding the degree to which corporate money influences public policy and industry regulation and/or deregulation. This raises the question of whether or not these phenomena are systemic features (or tendencies) of capitalism, and thus not specific to developing economies. Extensive similarities between developed and developing countries with respect to both corporate managerial and financial opaqueness, and the political influence of vested corporate interests, will undermine some of the explanatory power of Root's take on the challenge of global development. Root is not unaware of alternative Marxist and radical approaches. He explicitly asserts that the old dichotomy between capital and labour is anachronistic, that is, it is no longer applicable in a world replete with advanced global communication and information technology. In this context, Root argues that access to information is the road to wealth. The potential gains that accrue from this access are available to all agents, independent of class, although he acknowledges that there is no reason to expect such gains to be equally distributed. Consistent with mainstream methodology, the agents making economic decisions are assumed to be generic, representative individuals (or individual households). Implied here is a model where these representative agents have stocks of investable wealth and enjoy the ownership of various productive resources. In this context, it is their savings and investment decisions that come to the fore. The stark scenario confronting agents who have virtually nothing to sell but their capacity to work slips off the analytical screen. As a result, wealth creation is identified with the exploitation of market