Labor and community activists have organized around raising wages for low-wage workers, notably through the "Fight for 15" campaign among fast food workers. This study uses skills data together with manager survey data to estimate occupational wages. Quantile regression was used to estimate a skills-based wage. The analysis provides empirical support for a US$15 an hour minimum wage. The results indicate that low-wage workers possess skills that are undervalued in the labor market.
The Weisskopfian approach has dominated empirical studies of the US rate of profit for the last thirty-five years. Forty-five years earlier, Michal Kalecki developed a different frame suitable for empirical profit rate studies, which had the potential to give different, but complementary, insight into the profit rate analysis based on the Weisskopfian approach. This paper first presents a development of the Kaleckian frame. It then applies this frame to the US economy and presents some preliminary empirical results.
I have argued elsewhere1 that the formation of the English Premier League (EPL) can be interpreted as an instance of accumulation by dispossession. This paper complements that analysis by arguing that the theory of "Social Structures of Accumulation" can also be used to locate the formation of the EPL within the modalities of the structural changes that characterized the move to neoliberalism. The conclusion remains that the role of football2 in the neoliberal restoration of capitalist class power cannot be ignored.
Determinism is considered to be the doctrine teaching that a particular aspect or part of the social whole has a predominating influence on all the others. Several authors hold that economic determinism reflects the idea of a linear causality, i.e. of direct relations between a paramount economic cause and the effects that passively flow from it. Due to this linear notion of causality—they argue—the economic base is the necessary and, in itself, sufficient cause, whereas the super-structure is stripped of its autonomous role and production relations are the direct offshoot of the prevailing state of technology. In fact, this conception is typical of mechanistic, rather than Marxian, materialism, and as it tends to obliterate the role of super-structural factors, it is unable to account for the rise of existing forms of society and their different characteristics. The author’s arguments against the characterization of historical materialism as a deterministic approach are linked to his claim that socialism can be implemented by creating a system of democratically managed firms.
In contemporary discourse, cooperatives are often considered as vehicles for post-capitalist social transformation. However, theorists affiliated with the first, second, and third Internationals groupings of socialist parties suggested that cooperative potential was circumscribed by market coercion, leaving co-ops with limited pedagogical value and subordinating them to political movements. Their experience suggests it is important to avoid conflating cooperatives’ demonstration of post-capitalist labor norms with the strategic problems of creating a post-capitalist society.
Like several other countries in Latin America, after 2003 Argentina took considerable steps to distance itself from the neoliberal policies it had followed for almost 30 years. Yet there have also been critical continuities from the neoliberal era. Our argument is that these continuities manifest themselves most clearly in the nature of economic growth and in the endurance of some of the most troubling trends in labor markets over the last 30 years.
We argue that corporate social responsibility depends on two distinct stylized facts concerning régulation and power. The first—institutional CSR—is institutional in nature, the other—strategic CSR—is economic and productive. The former permits and stabilizes the latter, which in turn gives rise to political compromises structuring institutional mechanisms. CSR strategies and institutions correspond to a private, oligopolistic régulation which shows no signs of being able to pursue a sustainable development regime.
This paper is structured into four different parts. In the first part the authors analyze the origins of banking and debt crisis in the EU. The state and the evolution of the EU banking sector before the crisis and in its immediate aftermath is analyzed in detail in order to dispel the myth of the existence of an exclusively debt-induced crisis. This part also introduces the notion of financialization into the analysis. The second part analyzes the crisis-related dynamics by using endogenous monetary theory and makes particular use of balance-sheet recession as a concept. The third part introduces political consequences of the banking and debt crisis in the EU by focusing on the political crisis of legitimacy and its impact upon the EU integration process. In order to deal with this topic the authors borrow several concepts from critical international political economy such as transnational elite, knowledge production, and hegemony. We posit a close link between actions of the European transnational elite, crisis origins, and their ramifications. The fourth part focuses on the two most-discussed policy solutions in tackling the crisis: the banking and the fiscal union as well as their feasibility. Additionally, it lays out some fundamental trillemas for creating a viable way out of the crisis which are unfortunately often neglected in public debate. The main argument refers to the growing impact of financialization in the EU and its detrimental effect on the potential for integrated, stable, and prosperous EU economies. The authors explain the changing social, political, and economic landscape and evaluate the main challenges and obstacles to economic and political governance in the EU. The paper is concluded with some heterodox policy recommendations for overcoming them.
There is growing awareness of the need for interdisciplinary research on complex issues, but also of the obstacles that historical boundaries between social disciplines pose to such dialogue. It is increasingly recognized that the somewhat constitutive autonomy, the progressive autonomization, and finally the "imperialism" of economics have severely reduced the possibility of interdisciplinary discussion. This paper is a first step towards developing a research program on the foundations of a non-imperialist economics. It investigates gift exchange as a missed opportunity for economics. It aims at showing that, by refusing to tackle the complexity of the gift, economics has not only lost an opportunity to develop a method suitable for the analysis of complex problems, but has voluntarily chosen not to follow a path which would have prevented it from colonizing other disciplines. Reintroducing the concept of gift into the economic discourse may thus represent a required precondition to produce an innovating discourse on economics.
The decade of the 1980s witnessed massive changes in the internal structure and functioning of English football.1 Several rules, instituted during the infancy of the professional game to limit profit-making, were overturned with remarkable rapidity within the space of a few years, culminating in the formation of the English Premier League (EPL) in 1992. In this paper, I engage with two questions. One, why and how was the century-old structure of English football so rapidly transformed and what were the consequences? Two, what sort of Marxian theoretical framework can we use to understand the historical trajectory of English football? With respect to the former, I follow David Harvey’s analysis of neoliberal strategies used to restore upper-class dominance to argue that the formation of the EPL can be interpreted as another instance of accumulation by dispossession, one among myriad attempts to solve the profitability crisis of the 1970s by creating an avenue for financial speculation in football clubs. Together with the deregulation of television, it converted football from a domain formerly regarded as "off-limits to the calculus of profitability" into a "business proper." In terms of a theoretical framework, I propose that it is useful to think of football as serving global capitalism in a dual manner: as an avenue for accumulation (the accumulation function) and as a tool for legitimizing capitalist rule by producing alienated consciousness in society (the legitimation function).
This paper presents a novel perspective on industrial practices in modern competitive capitalist economies, questioning, in particular, the link between prices, competition, and the quality of goods and services. It tries to characterize a business practice that consists in reducing prices and maintaining (or increasing) profit margins by reducing the quality of goods and services while still presenting them as the same as before. The paper is primarily concerned with the practice of producing inferior quality goods by reducing the quantity of inputs used in the production process, or mixing inputs with cheaper constituents. The proposed term for this practice, "industrial seigniorage," is based on the historical privilege of feudal lords (from Old French seigneur), who—possessing the right to mint gold coins—made a profit by adding cheaper base metals to the bullion. The present, essentially exploratory investigation attempts to delineate the widespread existence of such practices in various industrial sectors. It strives to explain the fundamental elements of consumer behavior that enable this practice to exist and discusses the effects of industrial seigniorage on several social issues. The attempt of the paper is finally to show that contrary to the ideology of capitalism, competition does not necessary lead to benefits for consumers or to an increase in product quality.
This paper investigates the evolution of Venezuela’s political and economic scenario over the last 15 years. I explore in depth both the achievements and the unsolved problems of the Venezuelan demand-led growth model. Recalling Kalecki’s analysis of underdevelopment, I highlight Venezuela’s problems that depend on the constraining role played by the existing institutions. I conclude that the real challenge consists of a deep institutional change, possibly along the lines portrayed in the 2007 constitutional referendum.
The paper develops a model of economic fluctuations in the medium run and their relation with the short-run macroeconomic equilibrium. The business cycle is the result of two separate forces. On the one hand, there is Harrodian instability. On the other hand, this instability is contained by the inherent contradictions of capitalism. I focus on two of these contradictions: the profit-squeeze that results from the tightening of the labor market as employment and utilization increase, and the financial instability hypothesis as formulated by Hyman Minsky. With the inclusion of overhead labor, the model can explain the U-shaped behavior of the wage share along the business cycle (wage share decreases for low levels of utilization and increases for higher levels) that prevailed in most of the post-WWII period, as well as the decrease in the wage share as utilization increases that has been observed in the most recent cycles.
This paper draws on feminist and Marxist traditions to develop a framework for analyzing job quality, which incorporates context, social relations, and power. Job quality among small business owners in low-income communities surrounding Cape Town, South Africa is analyzed using data from semi-structured, time-intensive interviews. The results reveal a complicated story of self-employment being a means of expressing creativity, forming identity and community, while simultaneously being characterized by insecurity and harsh constraints.
Studies have pointed out that the value of markets is related to their impact on the character of a society. Karl Polanyi’s thesis about social disembeddedness attributed to 19th century economic liberalism the responsibility for consolidating the process of separating markets from society, which changed the dynamics between the state and population when economic rationality began dictating their connections. However, Polanyi only suggested analyses regarding power relations between these three elements and their effects on the social context. This paper argues that Michel Foucault’s writings concerning technologies of power and biopolitics complement Polanyi’s considerations insofar as they provide an understanding about how biopolitics emerged and how this led to a new posture of the state regarding population care and economic environment regulation.
This paper presents a theoretical explanation for the enigmatic discontinuity of the relationship between inflation and unemployment that has registered the U.S. economy since the early 1950s onwards. I argue that by distinguishing between two different historical episodes after World War II, the Golden Age and the Age of Decline, some insights in the Phillips curve puzzle can be gained and the analysis helps us to substantiate the existence of both downward sloping and upward sloping species of the curve. The regime change is illustrated here by building on a commonly used Post-Keynesian model of distribution and growth, which is enhanced to allow for an inflation process based on a conflicting claims approach and a growth rate form of Okun’s law. The model shows that the long-run Phillips curve can be either downward-sloping or upward-sloping, conditioned to the distribution of market power between business and labor.
In spite of the fact that Argentina has experienced a process of high sustained growth that created four million jobs, income distribution did not register substantial changes. The aim of this paper is to analyze the relationship between growth, employment, and income distribution; to clarify under what conditions a virtuous cycle of growth and employment may come to not have substantial impacts on income distribution; and to address the challenges that the working class will face in the future.
In combination the Okishio theorem (1961) and a theorem due to John Roemer (1981) imply that a capital-saving technical change could simultaneously (1) reduce production costs and therefore be adopted by profit-maximizing capitalists, (2) make the economy less productive because it is retrogressive, yet (3) raise the rate of profit even while the real wage remains constant. But how can a technical change which makes the economy less productive make capitalists better off if workers are no worse off? This article resolves this conundrum, and goes on to prove a third theorem which provides a way in the Sraffian framework to calculate precisely how much any individual technical change, introduced in any particular industry, increases labor productivity in the economy as a whole.
This article expands the Sraffian framework to address environmental sustainability by showing how to define and measure what ecological economists call "throughput" and increases in throughput efficiency. In the process it clarifies issues that are often muddled in the steady-state and de-growth literatures.
The purpose of this research is to analyze the process of (re)constitution of urban commons by actors involved in action situations. What follows is a description of the way in which these actors are organized and (re)claim urban space, asserting their rights to the city, in relation to the introduced framework. For my analysis of two initiatives in Poland I propose the approach of Elinor Ostrom and address its limitations and critiques as well as outline further areas of research.
This paper constructs a new solution to the Marxian transformation problem in a simple reproduction economy. It imposes two invariant equations using both constant and variable capital, separately, in order to solve the price and value system. This solution produces a profit rate that lays in between the "new interpretation" and labor-valued profit rates.
This article proposes a theoretical, incentive compatible, pollution damage revealing mechanism to induce people to reveal how much they are damaged by environmental degradation so polluters can be charged for the amount of damage caused. The mechanism is embedded in the participatory planning procedure that is part of a theoretical alternative to capitalism known as a "participatory economy."
This study empirically tests whether the growing importance of shareholder value orientation and financial market liberalization can explain the decline in Korean real investment since the Asian financial crisis. First, the results indicate no negative relationship between increased payments to financial markets and the slowdown in Korean real investment. Second, the estimation results do not support the assertion that financial investment earnings crowd out Korean real investment. Third, an increase in the level of uncertainty from financial market liberalization reduces real investment by Korean firms. These results suggest that financial market liberalization explains the slowdown in Korean firm real investment for the 1990-2010 period better than shareholder value orientation does.
The purpose of this paper is to give empirical content to the approach of international trade based on the principle of absolute advantage and to show that differences in productivity may give rise to transfers of value towards the units of capital with an absolute advantage in production. Our approach is based on the classical/Marxian theories of value and competition and it is operationalized using input-output data for the years 1995, 2000, and 2005 of four euro-zone countries (Greece, Spain, Finland, and the Netherlands). The derived results are consistent with the view that productivity differences persist over the years, which is equivalent to saying that the absolute advantage in production does not change into comparative advantage.
Contrary to his theoretical expectations, Veblen provided various reasons as to why a revolutionary overturn by the technicians was a remote possibility in America. In contrast to the American engineers, the engineers of Turkey have constructed an engineering outlook commensurate with Veblen’s abstract line of reasoning and participated in a political struggle against business interests. In this paper, using Veblen’s cumulative causation methodology, a theoretical answer for the origin, growth, persistence, and variation of the anti-business engineering outlook in Turkey is suggested.
The writings of key Marxist thinkers and revolutionary processes are examined with focus on their understanding of the relation between anti-imperialism and socialism. As a result of the class structures associated with imperialist domination, and the deficiencies within approaches that emphasize the need of a capitalist development stage prior to socialist transition, the analysis points toward the feasibility and strategic superiority of moving directly from direct or indirect imperialist domination into the transition to socialism.
This research aims to untangle and critically assess the core enabling myths of neoliberalism. The first step is to outline in brief the method of immanent critique, how it works, as well as its advantages and possible limits. The next step is to use immanent critique to strip the neoliberal narrative to its core, organizing myths: the myths of privatization, deregulation, and retrenchment of the welfare state.
Piketty’s study of capital and inequality, especially the distribution of the national income through a "capital-labor split," is examined and compared with a model developed from data sets from the U.S. Department of Commerce. Piketty’s inclusion of executive supersalaries as labor income is questioned as over-estimating labor’s share of national income distribution and labor’s role as a causal factor in the intensification of inequality.
Land reform has become particularly prominent in development discourse in recent times. Advocates emphasize its importance for poverty reduction in underdeveloped economies. However, how reform comes about and evolves and what it is and does is situated, not universal, as neoclassical economists suggest. This paper sheds light on the meaning, evolution, and outcomes of land reform in Ghana. It draws on historical and contemporary socio-legal and political-economic sources of evidence, analyzed within a critical postcolonial institutional framework. It shows important features of continuity and change in both colonial and post-colonial land reform. While pre-colonial land tenure relations are misrepresented as entailing no market activities, the concerted effort to introduce "capitalist markets" into the land sector to produce "socially efficient outcomes" has led to contradictory results.
The Egyptian Revolution 2011 has its roots in neoliberal policies, the premises of which are not shared by a large part of the Egyptian population. Starting from the call for "bread, freedom, social justice," this paper sheds light on the moral economy of the Egyptian people and finds the seeds of the revolution in a loss of entitlements which structural adjustment policies entailed for Egyptians as producers and consumers of bread, the symbol of life.
Distribution, one of the main concerns of classical political economists, is virtually a non-factor when it comes to modern neoclassical economics. The importance and influence of competition between different classes on the factor markets was understood to be a constant feature of capitalism in classical political economy. I have been able to translate this classical conflicting-claims approach in a consistent stock-flow model, with a working banking system, two classes, capitalists and workers, and a vertically integrated firm sector. National income is divided between workers and two sets of capitalist interests: industrial and financial. Results of the model reinforce the intuition of Kalecki’s 1943 essay on Political Aspects of Full Employment. The output of capitalist economies, as well as profits of capitalists, could be higher, with policies of low interest rates and a high worker income share. However, as the paper shows, these hypothetical results are not tenable under a capitalist regime, with long-run changes in the power structure endangering the current social order. Finally the disconnect between the community and capitalists becomes even clearer when we see that a high profit rate implies a lower national income.
For twenty years or so, the outsourcing of household tasks has been considered to be increasing in many countries. In some countries (particularly in France), extensive public policies have been put in place to develop demand and create employment by explicitly seeking to democratize consumption, which still predominantly concerns more affluent households. By using both quantitative and qualitative data, this paper aims to gain a better understanding of the factors of demand for these services and to examine the possibility of bringing the process of democratization to a successful conclusion. Due to the originality of the data used, my approach differs from previous research in two main areas: first, it highlights the lack of democratization of the consumption of these services (among working-age households), and second, it identifies the two forms of inequality underlying their development.
This paper aims to transcend current debates on Korea’s post-1997 restructuring, which rely on a dichotomy between domestic industrial capital and foreign financial capital, by adopting Nitzan and Bichler’s capital-as-power perspective. Based on this approach, the paper analyzes Korea’s recent political economic restructuring as the latest phase in the evolution of capitalist power and its transformative regimes of capital accumulation.
This paper analyzes the formation of a general rate of profit and the subsequent prices of production in the context of Marx’s two-sector scheme of expanded reproduction. We show that a consistent solution of the transformation problem can be derived by incorporating the original transformation procedure into the inter-temporal equilibrium framework provided by the scheme of accumulation. Previous solutions for the special case of simple reproduction are also examined, and it is shown that all these solutions rest on the restrictive assumption of constant wage rates.
The paper focuses on the successive tensions that emerged in Geoffrey M. Hodgson’s thought in his passage from political economy to Darwinian social science. The main argument is that Hodgson’s tensions have their origins in two fundamental problems: the irrelevance of population thinking in analyzing both social structures and historical processes; and the necessity of different levels of abstraction in biology and social sciences. Hodgson resolves the first tension by shifting the focus of inquiry from the analysis of capitalism to the genesis of a single convention. But afterwards he is unable to come back down from the extremely abstract level of evolving systems (ranging from amoebas to humans) to the analysis of social problems in contemporary capitalism.
The article provides insight into the contemporary international bioenergy debate and scrutinizes how the idea of biofuel production as a win-win-win solution to energy insecurity, climate change, and agricultural stagnation came into being, what discursive forces bind such a conceptualization, and where dislocations arise. Based on critical assumptions of discourse theory developed by Laclau and Mouffe, the analysis explores assessments, reports, policy papers, and other central documents from three influential international organizations—the International Energy Agency, Intergovernmental Panel on Climate Change, and United Nations Food and Agriculture Organization—that provide an entry point to the global debate on biofuels. We show that the bioenergy concept occupies specific positions and conveys different meanings within the three overlapping discourses of energy, climate, and agriculture. These three discursive areas are further "sutured" around the notion of biofuel production, where a hegemonic thread of the capitalist market economics, fixated on economic growth and presupposing the necessity of cost-effectiveness, results in internal contradictions and dislocations within the win-win-win conceptualization, emptying bioenergy of any content.
This article examines Brazil’s industrial trajectory, beginning with an analysis of the process of import substitution industrialization and its role historically. This is followed by an analysis of industry after the transition to neoliberalism. The resulting evidence implies a clear process of deindustrialization, and upon examining the pattern of exports, a process of re-primarization as well. The paper concludes with a discussion of these troubling trends for the current trajectory of the Brazilian economy.
The "green economy" is fast becoming the new alpha and omega for many policy makers, corporations, political actors, and NGOs who want to tackle both the environmental and economic crisis at once. Or would it be better to speak about "green capitalism?" Going green is not only important in the fight against environmental destruction, it also makes a country "stronger, healthier, safer, more innovative, competitive and respected," argues Thomas Friedman, the well-known New York Times columnist. "Is there anything that is more patriotic, capitalist, and geostrategic than this?" Indeed, the rationale underlying the nascent project of the green economy is that if the market could become the instrument for tackling the environmental crisis, the fight against this crisis could be the royal road to solving the problems of the market. Focusing in particular on the green economy’s impact on climate change, this paper analyzes the green economy as a hegemonic project that tries to retranslate environmental concerns into a new jargon, and to turn environmental conflict into a new motor for economic development.
Beginning in the mid-’80s, well after he brought his famous financial instability hypothesis to maturity, Hyman P. Minsky analyzed the evolution of capitalism. This paper proposes a critical reading of this analysis, focusing on the institutional dimension of Minsky’s research. From my point of view, if Minsky’s analysis constitutes more a history of capitalism than a theory of capitalism, this is because of the weak conceptualization of institutions and the absence of a genuine analysis of institutional change. From this perspective, I believe it necessary to clarify and complete Minsky’s institutional analysis. Only by doing so can we take full measure of Minsky’s research on the evolution of capitalism and identify all the repercussions for an analysis of the instability and resilience of the current stage of capitalism.
This paper addresses the question of how consumer credit has become a part of daily life of wage earners in the age of financialization by drawing on the experience of Turkey. Given the dearth of information in this area, it draws on fieldwork conducted among metal workers. In particular, the paper analyzes how consumer credit has become a part of daily life of workers, driven by socio-economic and institutional factors. The results show that consumer debt in Turkey has become a part of the daily life of workers as a consequence of, first, growing dependence on debt to support basic reproduction of labor power, and second, of the banks’ increasing orientation towards consumer lending. These findings also signal the deepening of the already unequal power relation between banks and wage earners.
As institutional economists recognize the limits of the canonical self-interest assumption, the lack of a theory of human valuation specifying the determinants of individuals’ utility judgments renders the prediction of behavior in collective action dilemmas virtually impossible. This problem hinders our ability to devise institutions to help cope with a variety of pressing social dilemmas that persist. We suggest that scholars can overcome this difficulty by integrating models of sociocognitive and moral development into the framework of institutional analysis and that such integration aligns with a new revolutionary shift in the social sciences. This shift is evidenced by the "rehabilitation" of key notions once downplayed due to the dominance of positivism. We present results from hypothesis testing linked to a cognitivist-developmental theory of human valuations. These results demonstrate that cooperative motivations and choices in public goods provision dilemmas are associated with further stages of interior development of the participants. We conclude that institutions addressing choices in morally relevant conflicts of action should be designed to promote swifter movement of individuals along the path of interior growth.
Since the 1970s, developed nations have seen the rise of the service economy, and forms of work organization have changed radically. As a result, employers have new requirements in the form of worker autonomy and so-called "soft" skills. These changes seem to mark a break with the expectations of submission and conformity highlighted by Edwards’s analysis. Nevertheless, the changes in employers’ practices reflect not so much the disappearance of forms of control as a shift towards less authoritarian but equally powerful forms based on the shifting of responsibility on to employees and the internalization of organizational norms. In making this case, we draw more particularly on the example of front-line workers in retailing and the hotel and restaurant industry.
In an article published in 2011 in this journal, Fred Moseley tries to discuss how the value of inconvertible credit money is determined in a Marxian theoretical tradition. In this critical comment, while sharing some crucial views with Moseley, the author makes a critique to some views in Moseley. The first critique concerns the so-called circular reasoning in the MELT as defined by the New Interpretation. The second concerns the relationship between Moseley’s MELT and capital accumulation. In his definition of MELT with inconvertible credit money, Moseley seems to overlook a theoretical tradition embodied especially in the work of Okishio-Foley-Kotz, which to different extents points out that the incentive and the real magnitude of capital accumulation or new investment play a crucial role in determining the value of inconvertible credit money.
The public choice model developed in this paper explains how increased external intervention and monitoring may lead to lessening of the intrinsic motivation within transitional economies to pursue reforms as prescribed by the Washington Consensus. This may lead to the slowdown of economic and institutional reforms sometimes followed by a lack of support for reform in popular votes at election time. Conditions under which this situation may occur are identified. The model is empirically tested for the period 1990-2001, encompassing more than fifteen East European countries. Results of the analysis suggest that the impact of external pressure expressed as the amount of U.S. loans on voting outcomes in transitional countries is significant. Consistent with prior expectations, a new class of private landowners and farmers support further privatization and market orientation and consequently vote for Western-oriented parties. Likewise, a new system of market based economies brings along more volatility and uncertainty creating an income based population segmentation and inequality. Higher fertility rates which are typically associated with lower income levels lead to fewer votes going to reformist, pro-market parties. Hence, foreign investors will clearly have to target the more affluent segment of populations in transitional economies for more support.
The global value chain (GVC) approach has become an increasingly relevant tool not only for the analysis of the current strategies of firms in global economic networks, but also for the economic development policies promoted by supranational institutions. The paper argues that this supranational institutionalization of such an approach has been contributing to legitimate a subordinated and exclusive pattern of integration to networks governed by the transnational fraction of capital rather than constituting a tool for enabling the strategies of developing countries and their actors. This is made possible through the transformation of the GVC into a neoliberal device for strategies implemented by global political networks as well as through the uncritical assimilation of a group of limitations in the GVC theoretical and methodological corpus, when those global political networks incorporate that theoretical approach. The paper concludes by suggesting the necessity of a new approach capable of overcoming the limitations of the GVC inspired policy prescriptions as a condition for forging global alternatives to neoliberal fast policies dominating the Global South.
In tumultuous times of financial crisis, capitalism is increasingly challenged as a desirable economic system. But are there any realistic alternatives to capitalism? Using theory and empirical research, this article offers one model of alternative business organization, focusing on not-for-profit cooperatives. If capitalism’s distinctive features are private property, profit, and (intra-market) competition, cooperatives can, if designed intelligently, function without these features.
Detailed analysis of BEA methodology and data strongly suggests that U.S. GDP is overvalued on the output side. The ability to generate income without producing real value-added output is a key characteristic of a "rentier economy." Broader indicators include a massive increase in financial activity and "finance, insurance, and real estate" (FIRE), declining manufacturing share, declining real investment in plant and equipment, increased outsourcing of production and rising trade deficits, declining employment and real wage growth, rising profits, growing inequality, and increasing aggregate demand dependency on private (household and business) and public sector debt. Based on these indicators, relative to other advanced countries like Germany, the U.S. has since the mid-1970’s increasingly become a "rentier economy." Grafting a schematic "rentier economy" onto a simple "free trade unequal exchange" model from Baiman (2006) highlights the labor exchange, inequality, and efficiency characteristics of rentier United States, unequal exchange (German), and developing country (China), economies. Reviving the U.S. economy and restoring full employment will require a public policy induced reallocation of resources away from rentier activity back to productive high-value added "unequal exchange" production.
This article further develops the notion of a turnover continuum so as to better comprehend the logical structure of Capital. The concept is modified to include surplus value and the interconnectedness of multiple industries. By bringing together the value of labor-power, the monetary expression of labor time, and socially necessary abstract labor time within a single analytical framework, the approach sheds light on the logic of Marx’s theoretical structure.
Mexican society has experienced three costly finance-related crises in 1982, 1994-95, and 2008-09. In each case the continuity of capitalist development depended in large part on state authorities drawing the worst financial risks into the state apparatus, that is, on socialization. While most understandings of socialization remain at a largely technical understanding, I argue that the socialization of financial risk in Mexico rests on distinctively class-based material and institutional processes. The processes of socialization have been historically constitutive of neoliberalism and the current phase of financial accumulation in Mexico.
Which is the fundamental contradiction of capitalism: the capital-labor polarity or the contrast between socialized production and private appropriation? Those looking on the capital-labor polarity as the main contradiction will argue that socialism arises when the passage from a system controlled by capital owners to a system of worker-run firms sparks off the reversal of the usual capital-labor relation. Conversely, those who think that the key contradiction of capitalism is the contrast between socialized production and private appropriation will contend that the social order to rise from the ashes of capitalism is a centrally planned system. This paper reports arguments in support of the former option
JEL codes: P13, P2, J54
In the standard Okishio-Morishima approach, the existence of profits is proved to be equivalent to the exploitation of labor. Yet, it can also be proved that the existence of profits is equivalent to the "exploitation" of any good. Labor and commodity exploitation are just different numerical representations of the productiveness of the economy. This paper presents an alternative approach to exploitation theory which is related to the "New Interpretation" (Duménil 1980; Foley 1982). In this approach, labor exploitation captures unequal social relations among producers. The equivalence between the existence of profits and labor exploitation holds, whereas it is proved that there is no relation between profits and commodity "exploitation."
JEL Classification: D46, B51
We propose an explanation for the growth of executive pay since the 1980s. New information and communication technologies (ICTs) appear to favor winner-take-all markets and to accentuate firm-level volatility of profits. We show, using an efficiency wage model, that these changes lead to higher executive pay. This is an example of what we have called, in other contexts, power-biased technological change (PBTC). The changes in market structure and the power of CEOs, however, are not only technologically but also institutionally contingent.
JEL Classification: D31, J41, O33
An analysis of Marx’s alienation theory is the starting point for establishing if alienation would actually be cancelled in a system of self-managed firms. As Marx held that alienation comes at various degrees and is strongest in capitalistic systems with hired labor, the author argues that democratic firm management would doubtless reduce alienation in general, but not eliminate those forms that are specifically related to the division of labor, to scarcity, and the resulting need to work for one’s daily bread. The author closes his paper with a criticism of Bigo’s approach to alienation in centrally planned economic systems and an analysis of capitalism as an inversed world.
Jel classification: B1, B14, J54, P13, P5
This paper examines the turn to considerations of property in arguments regarding the commons and the human right to water. It identifies commitments to liberalism in political economy approaches to property and human rights and develops a matrix for identifying non-liberal conceptions of the commons. The latter holds potential for an agonistic politics in which human rights are compatible with ecological sensibilities regarding the dynamics of conflict and cooperation in complex systems.
JEL classification: P48; Q25
This article discusses the empirical literature on the net transfer between labor and the state. It also provides international comparisons of the net social wage in the United States and other advanced capitalist economies on a consistent basis. The results indicate that the welfare state in the United States differs significantly in its impact on the income of labor from other advanced capitalist countries. This claim is based on the fact that the net social wage ratio in the United States is much smaller than that of other countries when all are estimated by the same empirical method.
JEL classification: B51, H53, P16
The current crisis takes place within a long downturn and new debates on the future of growth are emerging. This paper argues that some theoretical insights made by classical economists about the end of economic expansion are relevant for the discussion on the prospects for growth in rich countries. We focus on three key mechanisms related to contemporary radical economic analysis: over-accumulation, rising costs of accumulation, and the balance between productive and unproductive labor and consumption.
JEL classification: B12, O40, P17
This article pays homage to E. K. Hunt who was a founding member of URPE who helped build chapters on several campuses in western states. Much of the author’s own research work over the past forty years was an attempt to strengthen criticisms Hunt voiced long ago about markets and blind spots in mainstream economic theory. The article reviews work inspired by Hunt regarding externalities, endogenous preferences, the Coase theorem, and an alternative to the market system known as participatory planning.
JEL classification: B24, B25, B51, B52, D02, D11, D62
The recent theoretical works of the authors mentioned in the title of the paper provide thorough insights into the workings of contemporary capitalism. Derivatives are the key issue involved here. They comprehend financialization as a development within, rather than a distortion of, capitalist production. They nevertheless underestimate the ability of Marx’s analytical categories to capture the essence of contemporary organization of capitalism. A return to Marx is not only helpful but is also indispensable for clarification of some unformed aspects in their analysis. What is actually involved in financialization is not just the emergence of a structure enabling more effective valuation of financial assets; it is also the development of a technology of power that is superimposed on existing power relations for the purpose of organizing their functioning.
JEL Classifications: B14, B51, G32.
In this article we estimate the growth elasticity of employment by gender for 160 countries during 1990-2010. We then econometrically model these elasticities to draw out the structural contexts in which gendered employment outcomes respond differently to growth, including measures of economic structure, demographic change, macroeconomic stability, global stance and policy, and income distribution and institutional development. Our investigation shows that the relative size of the service sector and the ratio of female to male labor force participation are key determinants of differences in employment elasticities by gender, creating higher elasticities for women than men. We also find that the terms of global integration, as measured by the current account balance, growth in the terms of trade, and the share of foreign direct investment in investment, are important for both female and male employment elasticities.
JEL classification: O5, F4, B54
This paper offers an analysis of the current economic crisis in the United States that began in 2008, which is understood not as a business cycle recession but as a structural crisis. It presents a case that the current economic crisis is a particular type of crisis of over-investment, called an asset bubble induced over-investment crisis. It explains what is meant by that type of crisis and presents empirical evidence for the period since 1979 that supports this interpretation of the crisis. It argues that the forces that led to the current crisis cannot be seen in the behavior of the rate of profit.
JEL Classification: E11, E32, N12
Women continue to earn less than men in the United States. This article surveys the debate about why this occurs and synthesizes the policy remedies. Unionizing women, comparable worth, pay secrecy legislation, affirmative action, stronger non-discrimination legislation, and family-friendly policies can improve the gender wage gap. But doing so means that instead of attempting to pass federal legislation, advocates should target states to pass legislation and undertake pro-active remedies that can improve women’s pay.
JEL Classification: J7, J31, J38
This paper critiques the fiscal cliff mythology and the neoliberal push for economic austerity policies and sequestration of government programs. The purpose of the paper is to shift the debate to a social justice alternative that can sustain and enhance the social safety nets by implementing a full employment program that is both financially affordable and economically productive. First, the paper critically assesses the laissez-faire approach to job creation and lays out the mechanics of the job guarantee (JG) program as an alternative to the neoliberal model. Next, the paper critiques the deficit hawks’ and deficit doves’ "fiscal cliff" debate and demonstrates how the JG program can be financed according to modern money theory (MMT). Finally, the paper presents the cost estimation of the JG program for the United States to demonstrate its financial affordability and its productive capabilities.
JEL Classification: B5, E5, E12, E24, J2, J3, H3, H6, O51
Development theory presupposes historical specificity, but has not appropriately dealt with historical change. This inadequacy became more evident in the 1970s when history and other social sciences experienced a paradigmatic shift incited by the "cultural turn." Motivated by this shift, mainly its emanating concept of "contact zones," the paper adds to the literature occupied with the directions development theory may take in order to grapple with historical change as a result of the interaction between agency and structure.
JEL Classification: B41, F50, O10
This paper argues that neoliberalism’s global restructuring of electricity sectors has failed to deliver its proclaimed objectives and spawned threats to economic growth, financial market stability, environmental degradation, and society’s well-being. Using the case study of Australia, the paper’s régulationist analysis reveals the short-term outcomes and longer-term consequences of this restructuring, and concludes that the paradox of this structural change is the creation of inherent risks to the accumulation process.
JEL Classification: B52, D02, L94, Z18
This work contributes to the almost nonexistent literature on the profit rate of the financial sector. It updates the single study to include financial variables to cover the past decade, compares this profit rate to the (almost unpublished) Weisskopf and NIPA financial profit rates, compares the financial and nonfinancial sector rates, and details the procedure to construct the profit rate in the financial sector including relevant financial variables which capitalists consider to make profit-rate decisions.
JEL Classification: B50, E11
The idea that modern economics is necessarily based on market capitalism continues to dominate in scientific-scholarly discourse. The objective of this article is to present institutional matrix theory, or X- and Y-theory, as an alternative systemic institutional approach to economic and political development. It puts forward some new arguments to explain "grassroots resistance" to the deep marketization in many societies and answers the question why capitalism triumphs in the West and fails everywhere else.
JEL Classification: P51, B52, A13
This talk examines the popular idea that "economic growth" can continue indefinitely in post-industrial capitalist economies through the shift of labor to "service" sectors, particularly finance and information-based activities, in the light of the classical-Marxian theory of value and the related categories of productive and unproductive labor. As the generally accepted classical theory of land rent exemplifies, many types of income in capitalist economies, including interest, financial fees, speculative trading profits, and intellectual property royalties, arise as parts of the surplus value generated by the exploitation of productive labor appropriated through the assertion of various property rights. The dramatic phenomena of highly profitable "business models" based on network externalities associated with the internet and other information-based technologies do not represent new modes of value production, but modes (in some cases not particularly new) of participation in the pool of surplus value. National income accounting conventions that impute a fictitious output as a counterpart to incomes generated in sectors such as finance, professional and business services, education and health, and government, where there are no market-based measures of output create a distorted and misleading picture of value production and growth in advanced capitalist economies. A clear understanding of the origin of value in the expenditure of productive labor and of surplus value in the exploitation of productive labor is essential to thinking through the problems of post-industrial capitalist growth, distribution, resource conservation, and environmental protection.
Rising inequality affects the composition of asset demands as well as aggregate demand. The poor have few financial assets and their portfolios are skewed towards fixed-income assets. The rich, by contrast, hold a large proportion of their wealth in stocks. Thus, an increase in inequality tends to raise the demand for stocks. This generates capital gains, and these gains can fuel a bubble, as desired portfolios shift further towards stocks.
JEL classification: E11, E21
The paper examines the theoretical basis of fair trade as justice. Grounded largely in the work of Amartya Sen, it looks at the origins, motivations, and elements of fair trade. Fair trade is examined as a potentially transformational form of justice. The intellectual merit of this paper is to examine how fair trade outcomes advance our theoretical understanding of justice. The broader impact is to create a dialogue around understanding fair trade which can lead to further development of just and equitable trade systems worldwide.
If prejudice divides and weakens the working class, then capital owners can impose more inequality without fearing unified resistance. Frustrated workers turn on each other as scapegoats, blaming their economic hardship on diversity (in terms of race, religion, ethnicity, immigration status, age, gender, education, sexual preference, and so on). If a demagogue shifts the intolerance curve upward, a multiplier process ensues: intolerance causes inequality, and inequality causes intolerance. Religious nationalism, right-wing control of the media, or a facade of democracy will shift the resistance curve rightward. Under fascism, hate speech is reinforced by police power, so both curves shift. Liberal arts education and exposure to cultural diversity may counter these shifts.
This work employs the methodology developed by Thomas Weisskopf in the late 1970s to analyze the role of cyclical declines in the profit rate as the cause of crises in the United States during the postwar period, and contrasts the results with Weisskopf’s and other subsequent works he inspired. The generalized idea in the literature that cyclical crises are normally caused by a decline in the profit rate is confronted; the cyclical decline in the profit rate is a plausible cause of six out of ten postwar U.S. cyclical crises, but it is doubtful that this can be postulated as the case in the remaining four. Of these six crises, most of them can be related to the offensive rising strength of the labor variant of crisis. Finally, it is argued that analysis of the profit rate short-term dynamics is insufficient to provide a specific characterization of the neoliberal crises in opposition to the crises of the Keynesian period in the U.S. economy.
This paper argues that the fundamental cause of the current economic crisis in the U.S. economy was a significant long-term decline in the rate of profit from the 1950s to the 1970s. Capitalists responded to this profitability crisis by attempting to restore their rate of profit by a variety of strategies, including: wages and benefit cuts, inflation, "speed-up" on the job, and globalization. These strategies have largely restored the rate of profit, but have resulted in stagnant real wages for workers for decades. As a result, household indebtedness has increased to unprecedented levels and must be substantially reduced in order to make possible a sustainable recovery.
Stadial (stage-based) theory clarifies the relation between the evolving conception of mature socialism, on the one hand, and historical experiences of central planning and "market socialism," on the other. The core of mature socialism is a system of multilevel democratic iterative coordination (MDIC), involving mutually supportive and mutually defining roles for a central authority and enterprises. This conception clarifies the relations between the socialist core and various precursor forms in existing transitional societies.
The recent round of debate over China’s state and private economy has fundamentally touched upon whether or not China should abandon or strengthen the socialist elements within the market economy. In this paper, we argue that the debate is, in essence, a continued class struggle in the political and ideological superstructure. Then we discuss the foreseeable future of state-owned enterprises (SOEs) under current political and economic conditions. We will further propose the necessary reforms for the SOEs to move towards a truly socialist form of public ownership.
Many Americans believe free trade destroyed the U.S. industrial base, and blame foreign workers for taking their jobs. During World War II, Keynes had similar misgivings about the effect of postwar free trade on Britain’s economy. Yet for Keynes, economic forces are never inevitable, and capital rather than labor was the cause of trouble. His 1941 proposal for an International Clearing Union suggested capital controls, forced creditor adjustment, and an international fiat reserve as remedies for deindustrialization. This framework channeled financing toward production rather than speculation, leading to a rising standard of living for workers. A counterfactual with balance of payments data for the United States and China since 1982 suggests his ICU would have prevented U.S. deindustrialization, while yet permitting export-led growth in China.
This paper discusses the interplay between the rise of China and India in the world economy and the global climate emergency. It considers alternative growth scenarios for China and India. The results show that, to meet their respective global climate obligations, both China and India need to accept much slower economic growth rates and possibly economic stagnation in the coming decades. This clearly indicates that both China and India need to revise their growth-oriented model of development. Only a new development strategy focused on social and environmental progress, rather than economic growth, can be compatible with climate stabilization.
This paper examines changes in labor management of workers in UK emergency services under a regime of budget cuts and neoliberal state strategies. It takes an extreme case study, the emergency services, as an example of the limits of privatization and of the need, nonetheless, to re-assert management control over the labor process as part of the long-term strategy to solve the labor problem in public services.
One of the many lingering questions posed by the continuing meltdown of global finance concerns the role of securitization and the so-called shadow banking system in amplifying the scope of the crisis. As the crisis has revealed, a crucial function of many shadow financial units such as special purpose vehicles (SPVs) has been to make complex debt structures marketable and liquid. To what extent can the financial malaise of 2007 be attributed to the widespread use of such schemes? And how can this problem be conceptualized in contemporary political economy? In this paper we address these questions, examining the case of Northern Rock and its offshore SPV structure, Granite Master Trust. Drawing on the financial instability framework of Hyman Minsky, we find that the collapse of Northern Rock was caused by a confluence of two institutional trends in modern finance. First, it is the tendency of financial firms to exploit the regulatory gap by relying on financial innovation; second, it is the spread of the Ponzi culture as the defining mode of financing for today’s economic units. In this, the crisis of Northern Rock is symptomatic of a wider problem of today’s financial system where the process of securitization and liquefying debt structures is facilitated through the shadow financial system and often involves illicit practices, as well as outright fraud.1
This paper investigates the correlates of inequity in the distribution of exposure to air pollution in the state of Ohio. Although virtually all studies in the environmental justice literature analyze cross-sectional data, we construct a panel data set and estimate an econometric model of exposure utilizing the generalized method of moments. In addition, we postulate a surrogate for class position derived from data on estate tax collections. Even after accounting for some of the criticisms of the environmental justice literature, class and race are still significant correlates of the distribution of environmental burdens.
This paper argues that bonus wages, understood as lump sum payments contingent upon the achievement of a firm’s production goals, are superior to piece wages from the point of view of capital. While bonus wages reproduce the main traits of piece wages they also generate a higher degree of cohesion on the shop floor due to self-interest and mutual surveillance among workers. It is suggested that bonus wages are better analyzed within a Marxian framework for they are a manifestation of the capitalist need for control both of the labor process and the process of valorization, a double aspect that is not considered either in wage efficiency theories or in radical theories of cost of job loss. It is argued further that bonus wages cannot be understood on the basis of reciprocity or fairness theories for they are the result of conflict rather than the outcome of mutual comprehension and a taste for equity. It concludes that the separate goals of discipline and incentive are collapsed together because the use of bonus wages for incentive in the form of a bonus acts as an instrument of discipline.