nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2024‒01‒29
twelve papers chosen by
Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza”

  1. Ecological Crisis and the Global South Internationalist Ecosocialism : A Strategy for Comprehensive Sustainable Non-capitalist Development in the Global South By Khan, Haider
  2. Night-labour, social reproduction and political struggle in the ‘working day’ chapter of Marx’s Capital By Apostolidis, Paul
  3. Managing the Discontent of the Losers Redux: A Future of Authoritarian Neoliberalism or Social Capitalism? By Mark Setterfield
  4. Harmony and Divergence between Behavioral Finance and Islamic Finance By Noureddine Abdelbaki; Rajae Sabhi; Abderrahim Oiskhine; Soumaya Outellou
  5. Theorizing consumption and markets in the context of religion By Aliakbar Jafari; Mona Moufahim; Diego Rinallo; Samuelson Appau
  6. Race, class and interminority competition: the restructuring of capitalism and its consequences in South Central Los Angeles By Yohann Le Moigne
  7. Does the US Tax Code Encourage Market Concentration? An Empirical Analysis of the Effect of the Corporate Tax Structure on Profit Shares and Shareholder Payouts By Hager, Sandy Brian; Baines, Joseph
  8. Resolving the complexity puzzle: economic complexity and positions in global value chains jointly explain economic development By Tamás Sebestyén; Erik Braun; Zoltán Elekes
  9. Institutions, Comparative Advantage, and the Environment By Shapiro, Joseph S
  10. Ethical Challenges of Greenhouse Gas Emissions By Rashid, Redowan
  11. Implementing Ecosystem-Based Management through Cooperation: Resorting to Citizen Participation to Move from Theorization to Concretization? By Magali Benichou; Claire Ollier
  12. Eco-Anxiety, Connectedness to Nature & Green Equity Investments By Fabrice Hervé; Sylvain Marsat

  1. By: Khan, Haider
    Abstract: The main purpose of this paper is to explore a fairly comprehensive strategy for development as freedom beyond the ecological and other crises-filled capitalism in the 21st century. Accordingly, I try to find a way to integrate useful markets with the key characteristics of the Enabling Ecological Developmental State(EEDS) for the 21st Century in order to build a growing ecologically sustainable economy with equity in terms of capabilities. This will doubtless require a new global financial and ecological architecture. Relative Degrowth which involves sustainable people’s capabilities enhancing growth in the Global South, and degrowth in the Global North is a necessary condition for such a postcapitalist planetary civilization. We aim for theoretical clarification as well as for aiding the strategies of popular democratic movements. A few tentative steps are taken here to serve this dual purpose. Proceeding from a critical capabilities perspective that is fully grounded in social reality of deepening structural and ecological crises of the Global Capitalist System, we discover that such a perspective leads to the need to include among the characteristics of the Enabling Ecological Developmental State for the 21st Century its capacity to build an ecologically sustainable egalitarian development strategy from the beginning. In addition, democracy must be deepened from the beginning. For the Global South including Eurasia, and particularly for Africa and Latin America, a new cooperative community of nations following their own rhythm to reach their own dynamic trajectories towards development as freedom will be possible if they cooperate regionally and globally on the basis of equal sovereignty and mutual respect. One precondition is to pragmatically unite for a common economic strategy. For this a decolonization of the mind in the global south is also necessary. I conclude with some further thoughts on extending the model to an information theoretic based fractal model of development. A mathematical model of integrated financial and real sectors on abstract function space is presented in the appendix that can be extended for this purpose.
    Keywords: Enabling Ecological Developmental State(EEDS), Stoffwechsel, Ecological Imperialism, Relative Degrowth, New Non-aligned Movement(NNAM), New International Economic Order, Global South, Democratic Internationalism, Egalitarianism, Ecological Crisis, Global Capitalist System(GCS), Counterhegemonic movements, Ecosocialism, Nonlinearities, Multiple equilibria, Entropy and Information Theory
    JEL: F50 O30 Q0
    Date: 2024–01–01
  2. By: Apostolidis, Paul
    Abstract: This essay offers a new reading of Marx's chapter on ‘the working day’ in Capital Volume One by exploring the textual theme of night-time work. Even as Marx emphasises how the lengthening workday enables the super-exploitation of producers’ wage labour, his depictions of nocturnal experiences highlight more forcefully the destruction of workers’ reproductive resources, capacities and relationships. Night comes to represent the contracted time, condensed space, petrified relational bonds and thwarted desires for human reproduction in a free, fulsome sense that includes reinvigorating oneself, caring for others and enjoying experiences apart from work or care. Night's role as a privileged signifier and catalyst of these changes comes through in key passages about women, children and vampires, and in theoretically meaningful variances between Marx's German paraphrasing of English sources and those original texts, which replace Marx's phrases in English translations of Capital. Contemplating Marx's ambivalent reflections on legal-political action to limit workday hours, I argue for making struggles over social reproduction in a capacious sense central to working-class politics today. I demonstrate the power of this Marxian analytic by considering the compression of social-reproductive time among today's microworkers, who fuel the digital economy by performing platform-based ‘tasks’ at all hours for very low wages.
    Keywords: Capital; Karl Marx; microwork; night labour; social reproduction; working day; Sage deal
    JEL: R14 J01
    Date: 2023–12–19
  3. By: Mark Setterfield (Department of Economics, New School For Social Research, USA)
    Abstract: Neoliberalism eviscerated the value-sharing ethos of the post-war Golden Age (1945- 73), seeking to maintain social cohesion in civil society by `managing the discontent of the losers'. This involved reconciling working households to the realities of the neoliberal labour market by means of coercion, distraction, and debt accumulation { the latter serving to limit the growth of consumption inequality in the face of burgeoning income inequality. The global financial crisis (GFC) and Great Recession undermined the process of household debt accumulation, creating a crisis of neoliberal accumulation. Key to the institutional renewal required to address this crisis will be managing the discontent of the losers inherited from the neoliberal era. One possibility is Authoritarian Neoliberalism, based on increasingly illiberal amplification of the `coerce and distract' elements inherited from the Neoliberal Boom (1990-2007). The only viable alternative is Social Capitalism. This involves a renewal of social democracy that manages the discontent of the losers at its source, by creating inclusive and sustainable growth that both reduces the need and desire for illiberalism in the sphere of civil society.
    Keywords: Social structure of accumulation, capital-citizen accord, household debt, inequality, populism
    JEL: E21 B51 B52 P16
    Date: 2024–01
  4. By: Noureddine Abdelbaki (ENCGK - ENCG University Ibn Tofail of Kenitra, Morocco); Rajae Sabhi (ENCGK - ENCG University Ibn Tofail of Kenitra, Morocco); Abderrahim Oiskhine; Soumaya Outellou
    Abstract: This comparative study explores behavioral finance and Islamic finance in depth, highlighting their fundamental differences and points of convergence. On the one hand, behavioral finance delves into the study of cognitive biases and irrational behaviors that influence financial decisions, offering an essential psychological perspective on markets. Islamic finance, on the other hand, is founded on ethical principles in line with "Sharia" law, aiming to create a financial system based on justice and equity. Prominent figures, including Kahneman &Tversky (1979), Thaler (2015) and Usmani (2002), have played a major role in the development of these fields. This analysis also examines the implications of these two approaches for financial decision-making, financial products, ethics and social responsibility. It emphasized the importance of understanding the behavioral mechanisms behind investment choices, and of designing financial products in line with ethical principles. In addition, it suggests avenues for future research, including exploring the potential integration of behavioral finance principles into Islamic finance. Methodologically, this study is based on an analysis of academic literature and specialized sources in both fields, providing essential information on their origins, objectives, financial instruments and mechanisms. It then adopts a rigorous comparative approach to identify the crucial convergences and divergences between behavioral finance and Islamic finance. Through the synthesis of this data, this study aspires to offer an in-depth understanding of the possible synergies between these two approaches and their potential contribution to more responsible financial markets. Ultimately, this research aims to shed light on the complex relationship between behavioral and Islamic finance, while providing practical recommendations for policymakers, investors and financial market players seeking to leverage these fields to shape a more ethical, equitable and sustainable financial future
    Abstract: Cette étude comparative explore en profondeur la finance comportementale et la finance islamique, mettant en lumière leurs différences fondamentales et leurs points de convergence. En effet, la finance comportementale plonge dans l'étude des biais cognitifs et des comportements irrationnels qui influencent les décisions financières, offrant une perspective psychologique essentielle sur les marchés. En revanche, la finance islamique se fonde sur des principes éthiques en accord avec la "Charia", visant à créer un système financier basé sur la justice et l'équité. Des figures éminentes, dont Kahneman & Tversky (1979), Thaler (2015) & Usmani (2002) ont joué un rôle majeur dans le développement de ces domaines. Cette analyse examine également les implications de ces deux approches pour la prise de décision financière, les produits financiers, l'éthique et la responsabilité sociale. Elle souligne l'importance de comprendre les mécanismes comportementaux derrière les choix d'investissement et de concevoir des produits financiers conformes à des principes éthiques. De plus, elle propose des pistes de recherche futures, notamment l'exploration de l'intégration potentielle des principes de la finance comportementale dans la finance islamique. Sur le plan méthodologique, cette étude repose sur une analyse de la littérature académique et des sources spécialisées dans les deux domaines, permettant de recueillir des informations essentielles sur leurs origines, leurs objectifs, leurs instruments financiers et leurs mécanismes. Elle adopte ensuite une approche comparative rigoureuse pour identifier les convergences et les divergences cruciales entre la finance comportementale et la finance islamique. En consolidant ces données, cet article aspire à offrir une compréhension approfondie des synergies possibles entre ces deux approches et de leur contribution potentielle à des marchés financiers plus responsables. En définitive, l'objectif de cette étude est de mettre la lumière sur la relation complexe entre la finance comportementale et la finance islamique, tout en proposant des recommandations concrètes aux décideurs, aux investisseurs et aux acteurs du marché financier cherchant à tirer parti de ces domaines pour façonner un avenir financier plus éthique, équitable et durable.
    Keywords: Behavioral finance, Islamic finance, Cognitive bias, Sharia law, Financial decision-making.
    Date: 2023–10–26
  5. By: Aliakbar Jafari (University of Strathclyde [Glasgow]); Mona Moufahim (University of Stirling); Diego Rinallo (EM - emlyon business school); Samuelson Appau (melbourne business school - melbourne business school)
    Abstract: "This commentary section presents a dialogical discussion on Appau's (2021) ‘Toward a divine economic system', an article in which he explores religious exchanges in the context of a Pentecostal Church in Ghana and proposes ‘the divine economy' as an alternative economic system to interrogate and extend scholarship on the relationship between the market and religion. In a thought-provoking conversation, four commentators (including Appau) engage in a critical discussion aimed at generating new ideas on theorizing the complex relationship between the market, consumption, and religion."
    Keywords: Consumption, Market, religion, religionization of the market, marketization of religion, the sacred and the profane, spirituality
    Date: 2023–09–01
  6. By: Yohann Le Moigne (3L.AM - Langues, Littératures, Linguistique des Universités d'Angers et du Mans - UM - Le Mans Université - UA - Université d'Angers)
    Keywords: Race, classe, capitalisme, Africains-Américains, ghetto, hyperghetto, Los Angeles
    Date: 2023–12
  7. By: Hager, Sandy Brian; Baines, Joseph
    Abstract: EXECUTIVE SUMMARY *** Concerns about the market power of large corporations are growing. There are good reasons why monopoly now features so prominently on the political and economic agenda. Mounting evidence shows that corporate concentration stifles innovation and investment, resulting in lower-quality goods and services and less economic dynamism. Concentration is also a catalyst for rising wealth and income inequality, as monopolistic firms are able to suppress workers’ wages and charge consumers higher prices. *** Most of the public policy debate has been focused on the role of antitrust law in combating the monopolistic practices of large corporations. But recently, the focus has shifted somewhat, as more and more people come to recognize the role of federal and state-level taxation in understanding corporate concentration in the US. Yet, there are still many questions about the effect of taxation on market structure: Is there a tax advantage associated with bigness, as measured by revenues? If so, is this advantage confined to a few “bad apples” or is it widespread among large corporations? What role do the domestic and foreign tax systems play in encouraging monopoly power? What does an analysis of the relationship between tax and monopoly tell us about wider macroeconomic shifts in the US economy over the past few decades? *** The purpose of this brief is to address these questions by analyzing and comparing the overall effects of the US tax code on the profit share of large and smaller corporations. *** Our analysis reveals a striking tax advantage for big business in the US. Specifically, we find that the total post-tax profit share of the top 10 percent of listed corporations since the mid-1980s is consistently and significantly higher than their total pre-tax profit share, indicating that the overall tax structure (domestic and foreign) fuels profit concentration at the top of the corporate hierarchy. For example, in the most recent period covered in our analysis, 2019–2022, the overall tax structure has boosted the post-tax profit share of large corporations by 2.32 percentage points relative to their pre-tax share. We then assess the contribution of different tax jurisdictions to concentration by estimating the pre-tax and post-tax profit shares of large corporations, domestically and internationally. Here, our analysis reveals that the domestic tax structure is especially influential in driving concentration. Over the past four decades, the domestic post-tax profits of large corporations have been much larger than their pre-tax share, with the domestic tax structure augmenting the profit share of large corporations by 3.79 percentage points in 2019–2022. The effect of the foreign tax structure on profit concentration is more ambiguous. In most periods it is either slightly positive or slightly negative. For 2019–2022, the foreign post-tax profit share of large corporations was 0.87 percentage points higher than their pre-tax share. Based on these findings, we argue that the tax structure, especially the domestic tax structure, plays a crucial but still underappreciated role in exacerbating the monopoly problem. *** We go on to consider the wider consequences for the US economy of big business’s tax advantage. The political justification for corporate tax cuts—including those that were part of the Tax Cuts and Jobs Act (TCJA) of 2017—is that they would free up money for companies to invest in productive capacity, in turn generating higher employment and wages. But as our analysis shows, the capital expenditures of large corporations tend to decrease, not increase, when their tax advantage grows. Instead of fueling productive investment, the tax savings of large corporations are principally used to pay out dividends and buy back their own stock. This means that large corporations are less disposed to investments that may indirectly benefit ordinary workers and more disposed to shareholder value enhancement that directly benefits the asset-rich. Overall, we find that the tax system contributes in crucial ways to rising corporate concentration and to widening inequality among households. *** With the objective of leveling the playing field, our findings offer powerful justification for the restoration of graduated statutory corporate income tax rates in the US alongside a global minimum effective tax rate of 25 percent and a graduated excise tax on share buybacks. The monopoly problem has become endemic to US capitalism, and corporate tax reform on its own will not solve it. Yet one clear advantage of taxation is that it has a direct, and therefore much more easily discernible, effect on distributive outcomes compared to other policy measures. A more holistic approach, combining corporate tax reform with more robust antitrust regulation, the strengthening of workers’ rights, and increased public ownership in key sectors, is needed to build an economy based on equity, fairness, and prosperity for all.
    Keywords: big business, centralization, concentration, corporation, distribution, dominant capital, production, inequality, power, profit, shareholders, tax, United States
    JEL: P P1 P12 H2 H23 D4 D43 L L11 M
    Date: 2023
  8. By: Tamás Sebestyén; Erik Braun; Zoltán Elekes
    Abstract: It is now well established that complex economies with sophisticated export specialization experience higher income and economic growth levels. A group of countries, including those in Central and Eastern Europe (CEE), have pursued a distinctive and arguably successful economic development strategy, focusing on foreign direct investment and embedding in global value chains (GVCs) in manufacturing. However, while these countries now appear to have a high degree of economic sophistication after considerable modernization, they also face significant challenges in catching up with more developed economies in terms of prosperity. In this paper, we propose that considering the coordination of local and non-local capabilities in the same theoretical framework and empirical application helps to resolve this apparent complexity puzzle. Using a panel dataset covering 67 territories and 45 sectors from 1995 to 2018, we first show that measuring countries’ economic complexity based on value-added trade adjusts the resulting country ranking and reduces the measured complexity gap favoring CEE countries. Second, we argue that value-added-based economic complexity needs to be complemented by measures of positions in GVCs to account for access to non-local capabilities. Our results from benchmark regression analyses show that economic complexity and positions in GVCs together offer improved predictive power for income and economic growth. Finally, we show that GVC positions in services are particularly important for economic development but that a related pattern of diversification, whereby CEE countries and factory economies more broadly strengthen their GVC positions in manufacturing activities, is likely to limit their future opportunities for functional upgrading and for achieving highly complex economic structures that would be rooted in local capabilities.
    Keywords: capability base, economic complexity, global value chains, upstreamness, down- streamness, economic development
    Date: 2024–01
  9. By: Shapiro, Joseph S
    Abstract: This paper proposes that strong financial, judicial, and labor market institutions provide comparative advantage in clean industries, and thereby improve a country’s environmental quality. Five complementary tests support this hypothesis. First, industries that depend on institutions are disproportionately clean. Second, strong institutions increase relative exports in clean industries, even conditional on environmental regulation and factor endowments. Third, an industry’s complexity helps explain the link between institutions and clean goods. Fourth, a quantitative general equilibrium model indicates that strengthening a country’s institutions decreases its pollution through relocating dirty industries abroad, though increases pollution in other countries. Fifth, cross-country differences in the composition of output between clean and dirty industries explain more of the global distribution of emissions than differences in the techniques used for production do. The comparative advantage that strong institutions provide in clean industries gives one under-explored reason why developing countries have relatively high pollution levels.
    Keywords: Social and Behavioral Sciences, institutions, comparative advantage, pollution
    Date: 2024–01–11
  10. By: Rashid, Redowan
    Abstract: This article examines the moral aspects of greenhouse gas emissions, climate change, and the developing field of greenhouse gas removal (GGR). This text highlights the importance of urgently tackling climate change in accordance with ethical standards. It explores the ethical dilemmas presented by global warming, with a particular focus on the unequal impact it has on disadvantaged communities. The statement delineates six fundamental ethical principles, drawing upon UNESCO's guidelines on climate change. These principles encompass the avoidance of harm, the adoption of a precautionary approach, the promotion of equality and justice, the pursuit of sustainable development, the fostering of solidarity, and the incorporation of scientific information in decision-making. The study addresses three primary ethical dilemmas associated with greenhouse gas emissions, specifically emphasizing the need for international collaboration, the long-term consequences for future generations, and the insufficiency of existing theoretical frameworks. Furthermore, it examines the connection between greenhouse gas emissions and social justice, highlighting the importance of considering fairness and equality in climate action. The concluding segment scrutinizes the ethical dilemmas of GGR, emphasizing the societal, moral, and governmental apprehensions linked to these nascent technologies.
    Date: 2023–12–23
  11. By: Magali Benichou (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon); Claire Ollier (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon)
    Keywords: ecosystem-based management, cooperation, citizen participation, socio-ecological transition, sustainability, gestion écosystémique, coopération, participation citoyenne, transition socio-écologique, durabilité
    Date: 2023–06–29
  12. By: Fabrice Hervé (CREGO - Centre de Recherche en Gestion des Organisations - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UB - Université de Bourgogne - UBFC - Université Bourgogne Franche-Comté [COMUE] - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]); Sylvain Marsat (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne)
    Abstract: Drawing on a survey of 671 French individual investors, we document for the first time the connection between emotions towards the environment and investment in green funds. Both eco-anxiety and connectedness to nature have a significant impact on deciding to invest in green funds, but, interestingly, do not exert any influence on the amount invested. Hence, investing in green funds seems to be a way to buy a good conscience towards the environment, but the good deed ends there since the amount itself is not linked to environmentally related emotions.
    Keywords: Green Investment, Green Funds, Eco-anxiety, Connectedness to nature, Emotions, Behavioral Finance
    Date: 2023

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