nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2021‒01‒18
three papers chosen by
Karl Petrick
Western New England University

  1. Unbridgeable: Why Political Economists Cannot Accept Capital as Power By Nitzan, Jonathan; Bichler, Shimshon
  2. Financialization's conservation and transformation: from Mark I to Mark II By Tristan Auvray; Cédric Durand; Joel Rabinovich; Cecilia Rikap
  3. Racialized Burdens: Applying Racialized Organization Theory to the Administrative State By Ray, Victor Erik; Herd, Pamela; Moynihan, Donald

  1. By: Nitzan, Jonathan; Bichler, Shimshon
    Abstract: The theory of capital as power (CasP) is radically different from conventional political economy. In the conventional view, mainstream as well as heterodox, capital is seen a 'real' economic entity engaged in the production of goods and services, and capitalism is thought of as a mode of production and consumption. Finance in this approach is either a mere reflection/lubricant of the real economy (the mainstream view), or a parasitic fiction (the heterodox perspective). CasP rejects this framework. Capital, it argues, is not a productive economic entity, but a symbolic representation of organized societal power writ large, and capitalism should be analysed not as a mode of production and consumption, but as a mode of power. In this approach, finance is neither a reflection nor a fiction, but the symbolic language that organizes and creorders - or creates the order of - capitalized power. These are foundational claims. They go to the very heart of political economy, and they have far-reaching implications. So far-reaching, in fact, that if we accept them, we must rewrite, often from scratch, much of the theory, history and possible futures of the capitalist order. Many have complained about CasP being aloof. Our approach, they have argued, insists on being 'right' - to the exclusion of all others. It shows no interest in 'building bridges'. It dismisses neoclassical liberalism altogether, and although sometimes sympathetic to Marx, it aims not to revise Marxism, but to discard it altogether. In this research note - excerpted and revised from our 2020 invited-then-rejected interview with Revue de la regulation - we explain the basis for these complaints and why CasP and conventional political economy cannot be easily bridged. Stated briefly, the problem is not unwillingness but built-in barriers. As it stands, political economy cannot accept capital as power. Its very foundations prevent it from doing so.
    Keywords: capital as power,Marxism,neoclassical economics,political economy,power,value
    JEL: P16 D46 C18
    Date: 2021
  2. By: Tristan Auvray (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique); Cédric Durand; Joel Rabinovich; Cecilia Rikap
    Abstract: This paper argues that, as far as the investment behavior of non-financial corporations is concerned, the apparent continuity over the last four decades suggested by the financialization label is misleading. Indeed, while the disconnection between profitability and investment is a robust stylized fact for most of the period, with cumulative detrimental consequences for labor, we contend that the underlying mechanisms changed meaningfully at the turn of the millennium. This contribution proposes to establish-empirically and theoretically-two distinctive successive financialization regimes (Mark I and Mark II) and to explain their evolutionary articulation. Financialization Mark I is characterized by the empowerment of financial actors: in a context of high-interest rates and full-blown liberalization, diminishing retained earnings by non-financial corporations resulted in a dramatic slowdown of investment with cascading negative effects for labor. Contrastingly, Financialization Mark II is characterized by a strongly established financial hegemony with new forms of intellectual and financial monopoly. In this configuration, interest rates are low and global value chains are deeply seated. This fuels rampant deflationary pressure, which changes the overall dynamic of the profit-investment nexus. Then, in Financialization Mark II, contrary to what occurred during Financialization Mark I, distributed profits are the consequence of slow investment.
    Keywords: Financialization regimes,Investment-profit nexus,Payout,Globalization,Intellectual monopoly,Asset managers
    Date: 2020–12–17
  3. By: Ray, Victor Erik; Herd, Pamela; Moynihan, Donald
    Abstract: Administrative burdens allow a form of hidden politics to shape people’s experience of the state. But what do those politics hide? In this paper we seek to partly answer this question by developing the concept of racialized burdens. Racialized burdens are the experience of learning, compliance and psychological costs, which serve as tools to reinforce racial inequality; they are the handmaidens of the racialized state. To develop this concept, we examine the role of administrative burdens in the US state from the theoretical perspective of racialized organizations. This framework puts the focus on the effects of organizations on individuals, rather than using individual agency – of the client, or bureaucrat – as the starting point for analysis. Using examples from attempts to access citizenship rights – via immigration, voting and the social safety net – we show how burdens have historically been used to normalize and facilitate racially disparate outcomes from public organizations that promise fair and equal treatment.
    Date: 2020–12–09

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