Interview with Arjun Jayadev

Arjun Jayadev completed his Ph.D. in Economics at the University of Massachusetts, Amherst in 2005 and is now Assistant Professor of Economics at the University of Massachusetts, Boston. Professor Jayadev's research focuses on international and macro economics, development, and political economy. He is the author of PERI Working Paper, “Guard Labor: An Essay in Honor of Pranab Bardhan” (with Sam Bowles), and of “Capital Account Liberalization, Growth and the Labor Share of Income: Reviewing and Extending the Cross-country Evidence” (with Kang-kook Lee) in Capital Flight and Capital Controls in Developing Countries (edited by PERI Co-director, Gerald Epstein).

>> View dissertation: Financial Liberalization and Its Distributional Consequences: An Empirical Exploration (pdf)

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This interview was conducted by Adam Hersh, a UMass Ph.D. student and Research Assistant at PERI.

How did you arrive at UMass for graduate school?

Arjun Jayadev: I grew up and lived all my life in Bangalore, India before coming to the United States. There was a time when no one in the US, it seemed, had heard about the city, but now it’s well-known because of the booming IT sector and from periodic simple-minded articles by New York Times columnist Thomas Friedman. I started to get interested in economic issues partly because of my growing awareness of the uneven boom in city in the early to mid-1990s when I was growing up. One of my mentors in Bangalore at the time—Vinod Vyasulu—an economist and ex-Union for Radical Political Economics member—suggested that I come to UMass to further pursue my interests. As it turns out, he was right. I was very happy for the most part and learned a great deal during my years in Amherst.

Tell me about your dissertation. What surprised you most in carrying out this research?

AJ: For my dissertation, I worked on the relationship between financial deregulation and distribution. At some level these are two key “stylized facts” about the global economy in the last two decades—the vast and deep changes in the international financial architecture and important polarization in the distribution of income and opportunities. While many economists would see potential connections between these phenomena, there is still a paucity of empirical research on the topic and so it was a wide-open field.

I was dimly aware of the relationship between capital flows and inequality even growing up in India (although at that time I was more mesmerized by the vast and rapid growth in Bangalore as a result). I proposed the idea of exploring the relationship to two faculty members—J. Mohan Rao and Jerry Epstein—and both were happy to have me do it. I found some interesting things—the labor share of national income is negatively correlated with the ease of capital mobility in a cross-country sample in keeping with the hypothesis that increased capital mobility reduces the bargaining power of labor. I also studied the relationship between financial deregulation and inequality in two developing economies: India and Indonesia.

Perhaps what struck me the most while studying the international financial system was the fact that all countries had to deal with its vagaries at some level or another and that financial deregulation was a genuinely important macroeconomic question for policy makers in these times. Financial deregulation is not simply some abstract idea--the way a country integrates into the world financial system has profound and real implications for the welfare of millions of people.

The chair of my committee was J Mohan Rao, and Jerry Epstein, Michael Ash and James Heintz were my committee members. I was also really lucky to have the support and guidance from various other faculty members. In particular, Sam Bowles and “Uncle Jim” Crotty were great sources of inspiration. I also had many personally important interactions with Herb Gintis and more recently, Peter Skott.

What is "guard labor?" What does guard labor tell us about the state of our economy?

AJ: Well, guard labor is a term used by Sam Bowles and me in a joint paper to describe labor devoted to sustaining the status quo distribution of property rights and claims. While it is a difficult to have an extremely precise definition of guard labor, it highlights a common element across societies—namely that tremendous amounts of effort are expended by societies in order to maintain relationships of power. So diverse activities and occupations such as supervision, private and public guards, the military and even being unemployed work to reinforce property rights and contractual claims, or to deter the expropriation of property.

We found that there was a tremendous increase in guard labor in the U.S over the last century and also wide variation in the levels of guard labor in the OECD countries. While work on this is somewhat preliminary, one hypothesis Sam and I have is that guard labor is higher in countries where there is a greater amount of economic and political inequality. Such a contention might be supported by some correlations we found between guard labor and some measures of inequality. In addition, we would claim that from a classical viewpoint, guard labor is technically inefficient (instead of guarding, if guards were working, there would be more output), and so guard labor is a measure of social inefficiency.

Why is power relevant for economics? How does power enter into the economic analysis you do? Why don’t we see more applications of power in economic analysis?

AJ: Power is one of these concepts which everyone agrees is really important to understanding economic events but which rarely finds its way to center stage in an analysis. The ability to use force and coercion to achieve certain aims—at the broadest national level or the individual level—is absolutely critical to the distributional outcomes we observe in economies, whether in terms of the distribution of the wealth among nations (because of colonialism) or the unequal interpersonal distribution of income. In my own research I’ve co authored one paper on the subject, but it’s one of the important features of my planned future research. Specifically, I am interested in understanding the sources and effects of the enhanced power of financial elites across the world for distributional outcomes. It’s early stages yet though. It is also somewhat hard because ‘power’ is one of these analytical categories which is really hard to grapple with and define well (although it’s very interesting), even more perhaps than something like ‘class.’ I think that the intrinsic complexity and varied valid understandings of power are some of the reasons why it’s not a standard part of the economist’s toolkit.

Any advice to current or prospective economics graduate students? Why choose economics at UMass?

AJ: I think that economics at UMass is truly unique and there is no place with a greater concentration of interesting and distinguished progressive thinkers. So whenever possible, participate fully in the place and keep its spirit going.

As I said, I came to UMass on the advice of a mentor in Bangalore, but if I had to explain now why someone should come here to do economics, I would point to several things. First, it’s a remarkable place in terms of the sheer variety of approaches to economics and political economy that you are exposed to, especially in terms of Marxian economics. I took over twenty classes, all within the economics department, because there is so much to learn and so many scholars with different approaches and understandings of the crucial issues in economics. One consequence is a healthy disregard for disciplinary boundaries. I cannot think of a place where you can, with equal validity and devotion, do such varied and wide-ranging dissertations as here.

Second, in terms of progressive economics, I do not think that there are many more distinguished departments than UMass. This is the place to work with people who have spent their lives thinking about progressive politics and creating deep and abiding research agendas around these. Third—and extremely important—is your interaction with fellow graduate students that the economics department at UMass attracts. There is a genuine feeling of cohesion and affection among the group in general, and this translates into deep and important relationships throughout one’s stay here and throughout one’s career. I say with no qualms that I learned as much from my fellow graduate students about the world as from anyone else here—and in the most enjoyable ways too.

What is it about the graduate students or the department that creates these feelings? What did you learn from your fellow graduate students?

AJ: I'm not quite sure whether one can point to a single element. It is more a combination of a few things. For one, there has been a long-standing and genuine culture of collective action among the graduate students—from handling the distribution of teaching assistantships to active participation in the curriculum and the direction of the department. The second is a common feeling that this place, with all its complexities, is still an extremely special department and that it has organically created a confluence of several different and vibrant schools of thought which we all benefit from. Finally there is the fact that the graduate students at this place are almost universally interesting people. They come to UMass mostly because of some dissatisfaction with the status quo, and as such have been thinking deeply about issues, are widely read in economics and other subjects, and most often have taken direct political steps to achieve their goals (and continue to do so here). I learned too much from my fellow graduate students to speak about, but I would say that intellectually, I have a great debt to my fellow graduate students who provided me with many, many sophisticated insights into varied ideas that are important to know something about, and that I may otherwise have been stunningly oblivious to (to my detriment). A brief list of things that were discussed and explained over the years might include political philosophy, post-structuralism, the history of developing economies, environmental justice, world systems theory, and evolutionary biology, among others!

You describe many ways that research and teaching at the UMass, Amherst economics department are distinguished from most other graduate economics programs. Coming from this background, how is it interacting professionally with economists from other universities who may be trained in other schools of thought?

AJ: Well, so far I have not had a ton of interaction with other economists to speak with any sense of authority. But while giving a talk or while listening to talks, the impression that I have is that there is no hard and fast rule about the way you will be listened to or accepted. We are not untrained in the language of mainstream economics and therefore it is possible to find common ground or ways of expressing ourselves that are readily understood (even if not accepted), especially with empirical work. At the same time, journal submissions are still a little mysterious to me. I had a paper rejected at one mainstream journal and accepted at another comparable one. Perhaps the culture in presentations is a bit different in other places than UMass (there are more interruptions in other places). In any case, so far, things have been quite good.